美元/瑞士法郎 – 再次走高 (英文版)
On 16 June, the Swiss National Bank (SNB) decided to hike 50 bps to bring policy rate to -0.25%. This quickly induced a 1.0065-1.0060 bearish double top pattern. USD/CHF dropped 5.5% to trade a 0.9495 low. In similar fashion, EUR/CHF edged lower by 5.4%. Both declines were knee jerk reactions, but their future paths would diverge given the move on EUR/CHF will be a directional structural shift that reflects the 4% pa difference in Eurozone-Switzerland inflation profile (as we argued the EUR/CHF bearish case on 26 May EUR/CHF: Maintain bearish stance).
The SNB has abandoned CHF appreciation as a policy plank and in its efforts to moderate inflationary pressures, FX intervention is now a two-faced coin. The SNB has accumulated an estimated CHF775b of foreign currencies since 2009. Simply unwinding these would surface in price cycles when the CHF is deemed too weak from an inflationary stance. The bulk of the increase in Swiss headline inflation is generated from import prices, and besides an expected 25 bps hike at its 22 September policy meeting, the SNB is likely to tolerate nominal CHF strength relative to its main trading partners. The Fed is generally expected to hike 75 bps and 50 bps for its July and September policy meetings. Hence, come September the Fed’s Funds Rate Upper Bound (currently at 1.75%) will see a 3% divergence between USD and the CHF. USD/CHF traded down to 0.9495 but its fleeting moment with the 100-day moving average (dma) at 0.9525 has been brief and shallow. The technical indicator is now flashing signs of stability as USD attempts to move back into the cloud pattern that would negate the SNB-induced knee jerk reaction.
On the weekly chart, the recent decline saw a 0.9495 low before stabilising – this could keep USD in a buy-on-dips mode given there has been no sustained loss under 0.9473 (a prior significant high) and the pivotal 40-week moving average at 0.9442. This can conform to a simple price sequence of 5 moves 1-2-3-4-5. Utilising a simple Bollinger Band set-up on the daily chart, we derive the trappings of a 0.9417-0.9992 boundary.
We add a bit of colour to the navigation map. USD’s decline from 1.0237 fell within the norms of an impulsive five-legged 1-2-3-4-5 decline to reach a 0.8758 low in early January 2021. USD bounced back on a falling wedge reversal, with a bout of indecision masked within a triangle pattern that ran from March 2021 to early January this year. The corrective legs of abc are in play and as long as USD does not sustain losses under 0.9442-0.9417, there remains a missing leg of v to the upside. The momentum gauge, the ADX DMI has a low -DMI reading of 15.3.
On the four-hourly chart, USD/CHF is attempting to regain poise and reverse bearishness in what looks like a flag pattern. This is bearing in mind a USD move that retraces 76.4% of the most recent USD drop (around 0.9919).