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USDCHF asset's global decline is likely to continue

1/27/2023 12:29 PM

The USD/CHF pair is correcting upwards, around 0.9220, against a local increase in the US dollar, while the franc remains neutral.

The lack of key macroeconomic news and relative stability in world natural gas prices allow the Swiss currency to pause while other European economies are slowing. As for local dynamics, according to the Center for European Economic Research (ZEW) report, the index of economic expectations in January amounted to –40.0 points, up from –42.8 points earlier. Although the indicator has been in the negative area for a long time, from the June 2022 lows of –72.7 points, there is a steady positive trend with the prospect of entering the green zone in the second half of 2023.

The main driver of the asset, the US dollar, rose to 101.700 in the USD Index yesterday against the decrease in initial jobless claims to 186.0K from 192.0K a week earlier, although analysts expected their growth to 205.0K. Another positive factor is the UK Q4 gross domestic product (GDP) data, which reflected an increase of 2.9% compared to experts' forecasts of a slowdown to 2.6%.

On the daily chart, the trading instrument continues its global decline, forming a local downward corridor with dynamic boundaries 0.8960–0.9220.

Technical indicators weaken the sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO histogram forms corrective bars in the sell zone.

Resistance levels: 0.9280, 0.9410. | Support levels: 0.9160, 0.9000.

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