Dollar is trying to regain some momentum in a busy day ahead. Recovery in crude oil and gold both lacked sustaining strength. Crude oil is still kept below 70 level while gold was limited by 1130 and both are showing some sign of weakness in early European session. We might see a break of this week's high in dollar against Euro and Swissy in the session ahead. A busy calendar is scheduled today with focus on UK CPI and German ZEW economic sentiments in European session. A bunch of US data will also be featured including PPI, Empire statement manufacturing index, TIC capital flow, industrial production and NAHB housing market index.
Aussie is a touch lower against dollar after release of slightly dovish RBA minutes which hinted at a pause in the rate hike cycle. The minutes said that the three interest rate hikes since October is now giving it greater flexibility at future policy meetings and imply the possibly of slowing the pace. RBA emphasized that the rate adjustment would not be intended to slow demand compared with the current forecast path, but aimed simply at keeping the stance of policy appropriate for improving economic conditions. Meanwhile, the Aussie remains soft against Kiwi on expectations of earlier than expected rate hike from RBNZ next year.
Looking at the dollar index, some more sideway consolidation could still be seen with 4 hours MACD staying below signal line. But after all, short term outlook is still bullish with 75.83 support intact. We's still anticipating a break of 76.82 resistance to confirm medium term bottoming at 74.19. In such case, we'll be looking at a strong rebound to 38.2% retracement of 89.62 to 74.19 at 80.08, as a correction to fall from 89.62, in the least bullish scenario.
USD/CHF Daily Outlook
Daily Pivots: (S1) 1.0287; (P) 1.0323; (R1) 1.0351; More
Intraday bias in USD/CHF is cautiously on the upside for the moment and rise from 0.9959 might be resuming. As noted because, firm break of 161.8% projection of 0.9916 to 1.0175 from 0.9959 at 1.0378 will further affirm the bullish case that USD/CHF has bottomed as it shows that rise from 0.9916 is impulsive in nature. Further rally should then be seen to 1.0590 support turned resistance next. On the downside, though, below 1.0293 minor support will indicate that a short term top is formed and bring deeper pull back, possibly to 4 hours 55 EMA (now at 1.0226). Nevertheless, downside of consolidations should be contained by 1.0136 support and bring rally resumption.
In the bigger picture, the break of 1.0337 resistance last week and the sustained trading above 55 days EMA confirms that case that a medium term bottom is in place at 0.9916. In other words, whole fall from 1.1963 should have completed already. Also, the three wave consolidations from 1.2296 should also be finished too. Further rise should be seen to medium term trend line resistance (now at 1.1143) next and sustained there will indicate that whole rise from 0.9634 is resuming for another high above 1.2296. On the downside however, a break of 0.9959 support will invalidate this bullish view and argue that medium term down trend in USD/CHF is still in progress for 0.9634 low.
Economic Indicators Update
|00:01||GBP||RICS House Price Balance Nov||35.00%||39.00%||34.00%|
|00:30||AUD||RBA Meeting Minutes||--||--|
|08:15||CHF||Industrial Production Q/Q Q3||-0.10%||2.70%|
|09:30||GBP||CPI M/M Nov||0.20%||0.20%|
|09:30||GBP||CPI Y/Y Nov||1.80%||1.50%|
|09:30||GBP||Core CPI Y/Y Nov||1.80%||1.80%|
|09:30||GBP||RPI M/M Nov||0.20%||0.30%|
|09:30||GBP||RPI Y/Y Nov||0.20%||-0.80%|
|09:30||GBP||DCLG UK House Prices Y/Y Oct||-2.30%||-4.10%|
|10:00||EUR||German ZEW Survey (Economic Sentiment) Dec||50||51.1|
|10:00||EUR||German ZEW Survey (Current Situation) Dec||-60.1||-65.6|
|10:00||EUR||Eurozone ZEW Survey (Economic Sentiment) Dec||50||51.8|
|13:30||CAD||Labor Productivity Q/Q Q3||-0.50%||0.00%|
|13:30||CAD||Leading Indicators M/M Nov||--||0.70%|
|13:30||USD||PPI M/M Nov||0.80%||0.30%|
|13:30||USD||PPI Y/Y Nov||1.70%||-1.90%|
|13:30||USD||PPI Core M/M Nov||0.20%||-0.60%|
|13:30||USD||PPI Core Y/Y Nov||0.90%||0.70%|
|13:30||USD||Empire Manufacturing Dec||25||23.51|
|14:00||USD||Net Long-term TIC Flows Oct||$42.3B||$40.7B|
|14:15||USD||Industrial Production Nov||0.50%||0.10%|
|14:15||USD||Capacity Utilization Nov||71.10%||70.70%|
|18:00||USD||NAHB Housing Market Index Dec||18||17|