Usdchf pair consolidates as us manufacturing index declines

USDCHF Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.11%	9.3 Pips
Week to-date	0.51%	43.4 Pips
October	2.05%	173.3 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD Monthly Retail Trade (1-mth)

What happened lately

In the United States, the economic activity in the manufacturing sector saw a significant downturn as illustrated by the Empire State Manufacturing Index. The index dropped to negative territory, registering -11.9 points in October, which is a substantial decline from the 11.5 points recorded in September. This data, reported by the New York Federal Reserve, suggests a contraction in the manufacturing sector, signaling potential challenges for businesses within this industry. Such a drop can be indicative of decreased commercial activity and may reflect broader economic impacts such as reduced demand or rising costs. The contraction might pose concerns regarding economic resilience, especially if it echoes similar trends across other regions or sectors.

Regarding the USDCHF currency pair, on Tuesday there was a modest appreciation of the USD against the CHF, with the exchange rate rising by 0.11% to 0.86264. This movement suggests a period of consolidation where traders may be evaluating upcoming economic data or global financial conditions. The Swiss franc, known for its safe-haven attributes, often responds to risk sentiment in the global markets, as well as economic data releases.

The reported decline in the U.S. manufacturing index could create variability in USDCHF as market participants adjust their positions based on perceived economic weaknesses. If traders believe that the drop in the manufacturing index is a precursor to a broader economic slowdown, there may be increased safe-haven flows into the Swiss franc, potentially putting downward pressure on USDCHF. Moreover, upcoming high-impact U.S. events, such as the Monthly Retail Trade data, could further influence the pair. Strong retail data could counterbalance concerns raised by the manufacturing index, offering support to the USD. Conversely, if retail figures are lackluster or disappointing, it may exacerbate doubts about economic strength, increasing CHF demand and possibly leading to USDCHF depreciation.

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What can we expect from USDCHF today?

USDCHF on Tuesday rose 0.11% to 0.86264. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for USDCHF looks mixed as the pair is likely to consolidate above 0.86095 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.86368 or trades above daily pivot 0.86231. Break above could target R1 at 0.86401. While to the downside, we are looking at 0.86095 (S1) and daily low of 0.86062 as support levels. USDCHF need to break on either side to indicate a short-term bias. A break above 0.86368 may suggest continuation after recent positive movement.

For the week to-date, take note that USDCHF is mixed as compared to the prior week.

Key levels to watch out:

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