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Swiss CPI warmer than expected

Market Analysis
2017-06-08_12-18-09

AUDCHF, Daily

Swiss May CPI data came in a little warmer than expected, lifting to 0.5% y/y from 0.4% y/y in April. The median forecast had been for an unchanged 0.4% rate. CPI still remains below the cycle high 0.6% rate, which was recorded in both February and March. SNB president Jordan last week reaffirmed that central bank’s commitment to ease monetary policy settings, which are aimed at keeping a cap on the Swiss franc, and which he continued to describe as being “significantly overvalued.”

Despite the better than expected data, CHF’s weakness continues versus currencies such as US Dollar, Australian dollar and Euro. All these three crosses look bullish in the 4-hour charts, however the most interesting one is AUDCHF, since it manages to close yesterday above 20 DMA, at 0.7283. Hence today a Long intraday position was taken at 0.7301, which is against the general downtrend observed since February 22. Hence by considering that the pair moves into a downtrend channel, I entered Long since it seems that the pair has further space upwards before a possible retracement.

Target 1, was set at 0.7335, which is the confluence of 200-period EMA and the down trendline plotted since March 31, in the 4-hour chart. Target 2 is a daily target and was set at the 50-Day EMA, which is at 0.7380. Support is at 0.7240. In the Daily chart, RSI is at 49 sloping upwards from last week’s lows. Meanwhile Parabolic SAR turned positive.

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Andria Pichidi

Market Analyst

HotForex

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