Swiss Franc is mildly lower after SNB left three-month Libor target unchanged at 0.25 and reiterated its stance toprevent excessive appreciation of the Swiss franc against the euro, which would result in an undesired tightening of monetary conditions. Reactions to the announcement is mild so far. EUR/CHF spikes higher to 1.4628 after the release but was limited below 1.4635 minor resistance. We'd expect EUR/CHF to continue to craw low as dusts settle.
Elsewhere, dollar and yen are still soft as market consolidates. US trade deficit came in narrower than expected at -37.3b in January. Exports dropped to $142.7b which imports fell to $180b. Jobless claims remains elevated at 462k. Canada trade surplus came in at CAD 0.8b versus expectation of CAD 0.4b. New Housing price index rose 0.4% mom in January. Aussie continues to consolidate after data showed 0.4k job market expansion in February while unemployment rate rose to 5.3%. Japan Q4 GDP was revised down to 0.9% qoq, 3.8% yoy.
Looking at dollar index, with 80.88 minor resistance intact, consolidations from 81.34 is still in progress and another fall might be seen to 79.82 support and possibly below. However, we're expecting strong support from 79.56 cluster support (38.2% retracement of 76.60 to 81.34 at 79.52) to conclude the consolidation and bring rally resumption. Above 80.88 minor resistance will flip intraday bias back to the upside for retesting 81.34 high first.
USD/CHF Mid-Day Outlook
Daily Pivots: (S1) 1.0656; (P) 1.0725; (R1) 1.0765; More.
USD/CHF dips to 1.0723 today but recovers in early US session. Consolidation from 1.0897 is still in progress and more choppy sideway trading might be seen. Another fall cannot be ruled out with 1.0809 minor resistance intact. But downside is expected to be contained by 1.0608 cluster support (38.2% retracement of 1.0131 to 1.0897 at 1.0604) and bring rally resumption. On the upside, above 1.0809 minor resistance will flip intraday bias back to the upside. Decisive break of 1.0897 will confirm that whole rally from 0.9916 has resumed. Also, sustained trading above medium term trend line resistance (now at 1.0778) will pave the way to 161.8% projection of 0.9916 to 1.0506 from 1.0131 at 1.1086 next.
In the bigger picture, medium term correction from 1.2296 should have completed with three waves down to 0.9916 already. Current rise from 0.9916 is tentatively treated as resumption of the long term up trend from 2008 low of 0.9634. Sustained break of mentioned medium term trend line resistance (now at 1.0778) will further affirm this view. In such case, we'd be looking at stronger rise to 1.1963/2296 resistance zone in medium term. On the downside, sustained break of medium term rising trend line support (now at 1.0415) is needed to invalidate this bullish view. Otherwise, outlook will remain bullish.