The talk of a March rate hike by Fed is heating up this week. It's reported that based on Bloomberg's world interest rate probability tool, the markets are pricing over 50% chance for a March hike. Sharply higher than around 34% a week ago. This is seen as a reaction to recent hawkish comments from Fed officials. However, reactions in markets in general are not that apparent. US equities stayed cautious with DJIA closing up 15.68 pts or 0.08% at 20837.44. S&P 500 rose 2.41 pts or 0.1% to close at 2369.75. Treasury yields recovered with 10 year yield closing up 0.052 at 2.369, but stays near to bottom of recent range. Dollar index also rose slightly, back above 101 handle but stays far enough from 101.79 near term resistance. Dollar is also trading mixed, down against Euro and Aussie for the week.

Dallas Fed Kaplan: Don't overread market expectations

Dallas Fed president Robert Kaplan said that interest rate should rise "sooner rather than later". And "sooner rather than later means in the near future" but without reference to a specific time frame. He also urged to "guard against a situation where we get behind the curve". However, Kaplan also emphasized not to "overread or overreact" to market expectations. And "market probabilities can change very rapidly".

Trump to increase military spending by USD 54b

It's believed that fiscal policies of US president Donald Trump would play a great role in Fed's rate path. So far, as some Fed officials noted, with no details, fiscal policies are not taken into consideration in their projections yet. Trump will address the Congress for the first time today. Markets are eagerly awaiting for his speech for details on economic policies, in particular the tax reform and infrastructure spending. However, speaking to governors at the White House yesterday, Trump called for an increase of USD 54b in military spending. Meanwhile, budget for non-military programs will be lowered by the same amount. And that would be the core of the speech to Congress to day.

BCC urged "practical" Brexit

In UK, the British Chambers of Commerce published a report based on feedback from more than 400 businesses. It urged the government to give "solutions and certainty" to business before Brexit. BCC director general Adam Marshall said that "business communities across the UK want practical considerations, not ideology or politics, at the heart of the Government's approach to Brexit negotiations". Meanwhile, the report also urged the government to "aim to minimise tariffs, seek to avoid costly non-tariff barriers, grandfather existing EU free trade agreements with third countries, and expand the trade mission programme".

On the data front, New Zealand trade deficit widened sharply to NZD -285m in January. NBNZ business confidence tumbled to 16.6 in February. Australia current account deficit narrowed to AUD -3.9b in Q4. Japan industrial production dropped -0.8% mom in January, retail sales rose 1.0% yoy in January. UK Gfk consumer confidence dropped to -6 in February. French GDP and Swiss KOF are the only feature in European session. Canada will release IPPI and RMPI later today. US will release Q4 GDP revision, wholesale inventories, S&P Case-Shiller house price, Chicago PMI and consumer confidence.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7654; (P) 0.7681; (R1) 0.7699; More...

AUD/USD is still bounded in range of 0.7605/7740 for the moment. Intraday bias stays neutral at this point. Another rise cannot be ruled out. However, considering bearish divergence condition in 4 hour MACD, upside should be limited by 0.7777/7833 resistance zone and bring near term reversal. On the downside, break of 0.7605 support will indicate that rise from 0.7158 has completed already and turn bias back to the downside for 55 day EMA (now at 0.7559) first.

In the bigger picture, we're still treating price actions from 0.6826 low as a correction. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seek to 55 month EMA (now at 0.8186) and above.

Economic Indicators Update

STOCKS

Dow (20837.44, +0.08%) could face immediate resistance on the 3-day candle charts and pause for some time. But looking at the weekly and daily charts, there could be some more room on the upside. Overall long term trend is up but we could see small dip in the coming sessions before rallying upwards.

Dax (11822.67, +0.16%) is testing daily trend support and could bounce back in the near term towards 12000-12100 levels. Near term looks bullish.

Nikkei (19235.13, +0.67%) has bounced back from support at 19000 and could now move higher towards 19400. Clear contraction is visible on the 3-day candles and while that may continue for some more sessions, we should be ready to see a sharp break out on either side. This could provide some cues for direction in Dollar-Yen for the near term.

Shanghai (3226.46, -0.07%) came down yesterday, contrary to our expectation of a rise towards 3275-3300. In case it fails to bounce back above 3250 just now, it could be indicating a sideways movement in the near term within the 3275-3225 region.

Nifty (8896.70, -0.48%) closed just above the daily channel support at 8889 and while that holds there could be some chance of seeing another 1-2sessions of movement within the 8960-8900 region. While crucial resistance near 8960 holds, near term bias is bearish. We could see a fall towards 8800 or lower in the near term while the resistance holds.

COMMODITIES

Gold (1254) was almost unchanged after last couple of days gain and may approach the pivot at 1230 of the entire range of 1210-1265.

Similar kind of chart has been formed in silver (18.31) also as it is trading within a very significant resistance around 18.35. The possibility of a decline towards 18 levels can’t be ruled out.

Absolutely no movement has been seen in Copper (2.68), trading within the range of 2.60-2.83. It is still holding its crucial support of 2.60 and a close above 2.72 could open up 2.83 as well.

Brent(55.98) and WTI(54.13) spent a quiet session in the narrow range of 55-57.60 and 53-55 with no directional bias.

Trump-speech tonight along with US Prelim GDP q/q data at 7.00 pm IST and US CB Consumer Confidence data at 8.00 pm IST may add volatility across all the commodities .

FOREX

All eyes on the Trump’s speech tonight. Major currencies remain quiet and range-bound, but could possibly see some volatility over today and tomorrow.

Dollar Index (101.16) has been quiet and could trade within the 100.85-101.85 today also. Fresh volatility may be seen after the Trump’s speech. We need to see if it breaks above 102 to move higher or come off towards 100. Equal chances of movement on either side just now.

Euro (1.0585) is holding well below 1.0650 and while that holds, movement could be ranged within 1.065-1.050 region for the next couple of sessions. But keep an eye on the German-US 2YR yield differential which if moves lower could indicate a fall in Euro below 1.05. (Refer to Interest Rates section below)

Dollar-Yen (112.56), could be trading within the 113.50-112.00 region in the next 2-sessions. Clear contraction in Nikkei could possibly keep the Dollar-Yen ranged for some more time before a sharp movement on either side is seen. We need to keep a close watch on Nikkei.

Pound (1.2418) is trading near immediate support at 1.2382 and while that holds, we could possibly see some rise towards 1.25. Near term could be range bound within 1.2335-1.2382/50.

Aussie (0.7679) is holding above the 21-day MA support near 0.76610 and while that holds, we could see some up move towards 0.7700-0.7780. Overall ranged movement expected in the near term.

Dollar-Rupee (66.70) has been trading in the 66.65/75 region for the last 2sessions and has a fair possibility of testing important support near 66.50 before bouncing back from there. Trump’s speech tonight is going to be an important event to watch.

INTEREST RATES

The German-US 2Yr (-2.14%) is headed downwards and if continues to move towards -2.15% to -2.20%, could turn very bearish for Euro and could take the currency below 1.05 in the near term. Keep a close watch on the yield differential to get better directional cue on the Euro. However, we prefer a pause in the yield spread and expect a bounce back towards -2%.

he US yields have risen a bit. But overall the medium term looks bearish. The 5Yr (1.87%), 10YR (2.36%) and the 30YR (2.98%) are trading higher than previous levels of 1.83%, 2.34% and 2.97% respectively.

The US10-5Yr yield spread (0.50%) has fallen sharply and could move lower towards 0.475% in the near term.

EUR/USD

Major pairs were confined to tight intraday ranges this Monday, with the dollar closing the day mixed after Trump's comments during the American afternoon, saying that there is "no choice" but to spend on infrastructure. Trump will address the Congress this Tuesday, and present the first federal budget proposal, expected to call for a $54 billion increase in defense spending, to be offset with a similar cut in domestic programs. The EUR/USD pair retreat from a daily high of 1.0630 and settled a few pips below the 1.0600 level, having trimmed half of its daily gains, on renewed hopes that the US economy will get a boost from the new administration.

In the data front, the EU Economic Sentiment Indicator for February increased from 107.9 to 108.0, the highest reading in almost six years. Industrial confidence rose to 1.3 from 0.8, while sentiment in the services sector improved to 13.8 from previous 12.8, in line with data released since last December, indicating sustained growth in the region. In the US, orders for durable goods recovered in January, up 1.8% after a 0.8% decline in December, although the core reading, which excludes transportation, fell by 0.2% from a previous advance of 0.9%. Also, the Pending Home Sales Index unexpectedly decreased by 2.8% in the month.

The EUR/USD pair broke above a daily descendant trend line coming from February high at 1.0828, with a limited upward potential according to the 4 hours chart, as the recovery stalled around a bearish 100 SMA, whilst technical indicators have lost upward strength, with the Momentum having turned sharply lower within positive territory, and the RSI indicator losing upward strength within positive territory. Political woes have kept the upside well-limited in the common currency, but that doesn't mean that the pair can't run higher if the dollar keeps weakens. Still any advance should be contained by selling interest around 1.0700/20, the region that capped the upside for most of this February.

Support levels: 1.0520 1.0470 1.0440

Resistance levels: 1.0590 1.0635 1.0660

USD/JPY

The USD/JPY pair flirted with Friday's low at the beginning of the day, falling down to 111.93 before recovering up to 112.48 mid London morning. The pair retreated at the beginning of the US session, as US data was generally disappointing, with the advance in the Durable Goods Orders' headline, being offset by the core reading that came in negative, and pending home sales that fell well beyond expected. The pair, however, broke higher ahead of Wall Street close as stocks recovered their early losses, while Treasury yields advanced following comments from US President Trump, pointing to large infrastructure investment. The 10-year note benchmark jumped to 2.36% after plummeting to 2.32% on Friday, backing the advance in the pair. Holding near a daily high of 112.72, the 4 hours chart shows that technical indicators have turned sharply higher from oversold readings and are currently entering positive territory, not enough at this point to confirm a stronger advance, whilst the 100 and 200 SMAs maintain bearish slopes above the current level, with the shortest around 113.05. The advance could extend, should the positive sentiment persist, although investors may turn cautious and wait for Trump's speech before the Congress before giving the pair another directional push.

Support levels: 112.50 111.95 111.60

Resistance levels: 113.05 113.45 113.90

GBP/USD

The GBP/USD pair fell at the beginning of the day, extending its slide down to 1.2383 early London, on reports released by the Times, saying that the UK government is preparing for a potential independence referendum in Scotland next March. The news also reported that PM May agreed to such referendum, on the condition that it is held after the UK leaves the EU. The pair recovered from the mentioned low, advancing up to 1.2478 during the American session, on broad dollar's weakness. The UK will release its GFK Consumer Confidence Survey this Tuesday, expected to have fallen in February by 6 against January -5, while the House of Lords is expected to give a final verdict on the Brexit bill next Wednesday. From a technical point of view, the GBP/USD pair maintains a negative bias, as the intraday recovery stalled around a flat 20 SMA, while technical indicators have failed to surpass their mid-lines, and resumed their declines. The pair has bounced multiple times from the 1.2380 region, an immediate strong support, although it will take a break below 1.2345, February low and the 50% retracement of the latest bullish run, to confirm a steeper decline for the upcoming sessions.

Support levels: 1.2380 1.2345 1.2300

Resistance levels: 1.2480 1.2530 1.2565

GOLD

Gold prices extended their advance at the beginning of the day, with spot reaching a fresh yearly high of 1,263.79 before ending the day in the red, a few cents below $1,255.00 a troy ounce. The safe-haven metal eased on hopes US President Trump will unveil his infrastructure investment' plans this Tuesday, when he will address a joint session of Congress. From a technical point of view, the daily chart shows that the price surged briefly above its 200 DMA before reversing course, whilst technical indicators keep retreating within positive territory, yet at the same time, its holding at multi-month highs while developing above a bullish 20 DMA, this last at 1,236.98. Additionally, the pair is consolidating around the 61.8% retracement of the post-US election decline, indicating a limited downward potential at the time being. In the 4 hours chart, technical indicators have turned sharply lower from overbought readings, still holding within positive territory, while the price is well above all of its moving averages, with the 20 SMA heading sharply higher at 1,250.20, providing an immediate support.

Support levels: 1,250.20 1,242.50 1,230.00

Resistance levels: 1,263.80 1.273.20 1,281.70

WTI CRUDE

West Texas Intermediate crude oil prices closed the day unchanged, at $54.04, trimming its modest daily gains on news that a pipeline in Kirkuk, Iraq, was blown-up killing at least one and injuring several members of the Kurdish security forces. The pipeline is a focus of conflict, as it will allow Iraq to export oil through Iran, and diversify away from Kurdistan. Also, fears that increasing US production will offset OPEC's efforts to push prices higher, limited gains in the commodity. Technically, oil maintains the neutral stance seen on previous updates, with the price still developing above a horizontal 20 DMA, and technical indicators heading nowhere around their mid-lines. In the 4 hours chart, the price continued to move back and forth around a directionless 20 SMA, whilst technical indicators are standing within negative territory, but lacking directional strength.

Support levels: 53.40 53.00 52.50

Resistance levels: 54.75 55.30 56.00

DJIA

Another day, another record high for the Dow. The US index advanced 15 points or 0.08% to close at 20,837.44, its 12th consecutive record high. The Nasdaq Composite added 16 points and ended at 5,861.90, while the S&P closed at 2,369.73, up by 0.10%. Industrial and energy-related equities led the advance within the Dow, after US President Trump said that there is "no choice" but to spend on infrastructure. Caterpillar was the best performer, up 2.03%, followed by Chevron, which added 1.50%. The last time the Dow advanced for twelve days in-a-row was back in 1987, right ahead of the Black Monday and the market crash. Gains have been quite limited in the last four trading sessions, reflecting investors are hesitant to push equities too much higher. In the daily chart, the index remains well above a healthy bullish 20 DMA, while the RSI indicator hovers around 83, and the Momentum indicator retreats modestly from near overbought territory, still far from suggesting a downward move. In the 4 hours chart, the index still holds above a bullish 20 SMA, while technical indicators head lower within positive territory, lacking strength enough to confirm a bearish breakout.

Support levels: 20,794 20,742 20,695

Resistance levels: 20,855 20,900 20.940

FTSE 100

The FTSE 100 managed to add 9 points or 0.13% to close at 7,253.00 this Monday, helped by a weaker Pound that helped offset losses in the insurance sector. News that the Ministry of Justice changed the way of calculating personal injury claims affected insurance companies' equities, on speculation that payouts will be increased and affect companies' profits. Direct Line plunged 7.16%, while Admiral Group shed 2.46%. Financial-related equities also closed in the red, with Royal Bank of Scotland down 2.02%. The daily chart shows that the Footsie settled above its 20 SMA, currently at 7,239, while technical indicators present modest upward slopes within positive territory, indicating that the downside potential remains limited. In the 4 hours chart, however, the index is holding right below a bearish 20 SMA, while the Momentum indicator is unable to surpass its 100 level. The RSI indicator in this last time frame advances around 50, not enough to confirm further advances for this Tuesday.

Support levels: 7,238 7,195 7,160

Resistance levels: 7,285 7,315 7,342

DAX

European equities ended the day pretty much flat in a dull trading session, with the German DAX settling at 11,822.67, up by 18 points or 0.16%. An early advance in oil prices kept the energy sector up, preventing the index from ending lower, while financials underperformed, following the lead of their Asian counterparts. In Germany, Adidas was the best performer, closing up 3.88%, followed by E.ON that added 2.62%. Deutsche Boerse topped losers' list, ending down 3.93%, while Volkswagen shed 1.17%. DAX's daily chart shows that an early decline as contained by buying interest around a horizontal 20 DMA, currently at 11,744, while the Momentum indicator heads nowhere within positive territory and the RSI indicator turned flat within positive territory after correcting overbought conditions, all of which limits chances of a steeper decline. In the 4 hours chart, the index broke below its 20 SMA, but bounced from a bullish 100 SMA, while technical indicators also lack directional strength, but hold within negative territory, indicating that the index needs to regain the 11,900 level to confirm that the bullish trend remains firm in place.

Support levels: 11,828 11,781 11,737

Resistance levels: 11,865 11,902 11,945

GBPUSD - The pair continues to consolidate leaving directional move a challenge. However, it should head lower nearer term. Support lies at the 1.2400 level where a break will turn attention to the 1.2350 level. Further down, support lies at the 1.2300 level. Below here will set the stage for more weakness towards the 1.2250 level. Conversely, resistance stands at the 1.2500 levels with a turn above here allowing more strength to build up towards the 1.2550 level. Further out, resistance resides at the 1.2600 level followed by the 1.2650 level. On the whole, GBPUSD continues to face consolidation threats.

Yes, that's oil STILL at weekly resistance.

Click the link in that blog from early February to take a look at the higher time frame chart, or bring up the commodity on your own MT4 platform.

I'll stick with just showing the daily chart here today, focusing on something that I haven't brought up in any of the most recent oil blogs, that you can find on the News Centre.

Oil Daily:

What I'm talking about is the gap I've pointed to with the arrow to the left. While price is teasing the level, it hasn't actually touched it. Whether close enough is good enough as this gap also coincides with the weekly resistance zone, I'm not sure.

Do you see significance in this gap?

The Clash of the Titans

The Fed rate hike debate rages on with the market now nearing on a 50% probability of a hike in March after the Dallas Fed's Robert Kaplan repeated his view that the Fed should move 'sooner rather than later'. Recent Fed speakers and US data are nudging up March probability, leading up to 2 Key speeches by Yellen and Fischer on Friday. Also, President Trump was making overtones about future economic promises and all of which has seen the dollar turn stealthily bid and echoing US Bond yields for all the usual reasons.

Australian dollar

The AUD continues to find dip demand as commodities outperform and on the back of better domestic economic data. Again the recent rally was capped just above .7700 as several key crosses stalled out at critical levels. However, the Aussie is trading very constructively in the wake of the more hawkish commentary we've been hearing from the RBA Governor. Markets are standing firm ahead of this week's Q4 GDP release on Wednesday, which could provide the catalyst for AUD to surge above the current resistance levels.

Euro

The Euro is an adrift in mid-range back mid-range, but volatility has been rather subdued. While political noise out of Europe will be the key driver, after getting through the weekend without any unsavoury headlines, a sense of calm has engulfed the EU zone But don't get too complacent, as we are likely one headline away from another test of 1.0500. I sense that the short euro trade will require a good deal of fortitude to stay with given the growing near-term uncertainty of the USD.

Yen

US yields were the primary driver overnight as political risk in EU has tempered for now, but the currency markets are not about to get easier anytime soon. Outside of a Bond induced bound in the Greenback, investors are otherwise sitting fairly still, and the markets traded sideways.

While the dollar has caught a sneaky bid ahead of Trump's Congressional Address, let's not forget the plethora of Fed speakers on the ticket this week, concluding with Janet Yellen on Friday. If anything we have seen the Feds lean more hawkish since last week's FOMC statement, so eyes will be focused on Fed headlines.

The market is playing this week up as a Clash of the Titans (Yellen vs Trump), but the dollar bears should take caution if Trump follows through on Infrastructure and Yellen ratchets up the Rate hike rhetoric to end the week, as USDJPY will surge. I guess the big question for the market is, will Trump use tonight's platform to execute?

Political uncertainty, in particular the French Presidential election, in the Eurozone has unnerved European bond markets. Although far right candidate Marine Le Pen is expected to lose in the second round of the election, the market still finds this tail risk non-negligible. Indeed, recent movements of French bond yields, as well as French-German yield spreads, have been dominated by opinion polls. French yields, as well as French-German yield spreads, climb higher as Le Pen's supports gain, vice versa. For instance, we notice that France's 10-year bond yield has started falling since February 22, after veteran centrist Francois Bayrou surprisingly joined Emmanuel Macron in his campaign. Yields continued to drop, falling to a one-month low of 0.92% today, as the latest polls signaled that Macron would beat Le Pen in the second round of presidential elections in May. Simultaneously, French-German yield spreads fell to around 0.72%, the lowest level in a week.

Volatility in the bond markets would remain elevated as we approach the first, and second and final round of the election, to be held on April 23 and May 7, respectively. Latest polls (conducted on Feb 26) by Odoxa/Dentsu showed that supports for Le Pen and Macron in the first round of the election were 27% and 25%, respectively, compared with François Fillon's 19%. It is expected that Macron would retain 61% of the vote, compared with Le Pen's 39%, in the second round, making him the French President in the coming 5 years. Separately, polls by Figaro/LCI showed that Macron would be winning the runoff by 58% to 42% for Le Pen. Indeed, even before the Macron-Bayrou alliance, polls have been suggesting Le Pen would lead in first round but lose in the second and final round. While the probability of Le Pen's victory has been low, the market remained concerned about such risk, especially given the lessons of Brexit referendum and the US presidential election. Of utmost worries are some of the key features in the National Front Party leader's platform including referendum on France's EU membership, Bank of France to directly finance the government and redenomination of about 1.7 trillion euro of French public debt into francs.

Concerns over Frexit and redenomination of French debts have triggered selling of French bonds and purchases of German bunds as the latter is regarded as safe haven at times of political uncertainty in the Eurozone. Another phenomenon revealed over the past week was the selloff in Germany's short-dated bund yields. For instance, Schatz yields plunged to a record low -0.95% while Bobl yields felt o a 7.5-month low of -0.6% last Friday. Undoubtedly, concerns over Frexir and risks over French bond redenomination is a key reason driving bund yields deeper to the negative territory. However, we believe ECB's move to buy more short-dated debts is a more long-lasting factor pressuring yields.

In December, ECB announced it would lift restrictions on buying debt with yields below the deposit rate of -0.4%. As no guidance on this kind of bond purchases has been provided, how much of these bonds would be bought and when the purchase would begin remains unknown. Danske estimated that15% of the QE purchases in German government bonds would have to be below the deposit level, assuming unchanged bund yields throughout 2017. However, if bund yields increase +25 bps across the curve, the ECB could avoid buying below depo in 2017, while the buying below depo would increase to 40% if yields decrease -25 bps. Citigroup predicts that the ECB will buy around 80B euro of 1-6 year bunds just to complete QE to year-end. While these estimates are based on limited details on ECB's plan, what is certain is that the move would continue put bund yields, particularly in yields in the 1-6 year segment on the German curve, under pressure.

Daily Pivots: (S1) 1.0536; (P) 1.0577 (R1) 1.0597; More.....

EUR/USD continues to consolidate above 1.0493 temporary low and intraday bias stays neutral first. With 1.0678 minor resistance intact, deeper decline is still expected. We're viewing fall from 1.0828 as resuming the larger down trend. Below 1.0493 will target 1.0339 low first. Break will confirm our bearish view and target parity. However, break of 1.0678 will dampen our view and turn focus back to 1.0828 resistance instead.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

Daily Pivots: (S1) 1.2412; (P) 1.2490; (R1) 1.2534; More...

GBP/USD is still bounded in range of 1.2346/2705. Intraday bias remains neutral first and outlook is unchanged. Price actions from 1.1946 are viewed as a consolidation pattern, with rise from 1.1986 as the third leg. In case of another rise, we'd expect upside to be limited by 1.2774 to bring larger down trend resumption. On the downside, below 1.2346 will revive the case that such consolidation is completed at 1.2705 already. In that case, intraday bias will turn back to the downside for retesting 1.1946 low.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Daily Pivots: (S1) 1.0038; (P) 1.0077; (R1) 1.0101; More.....

USD/CHF continues to consolidation below 1.0140 temporary top. Intraday bias remains neutral at this point. With 0.9966 support intact, further rise is in favor. Above 1.0140 will turn bias to the upside and target a test on 1.0342 resistance. Based on neutral medium term outlook, we'd be cautious on topping at around 1.0342. Meanwhile, break of 0.9966 will indicate completion of the rebound from 0.9860. And intraday bias will be turned back to the downside for 0.9860.

In the bigger picture, prior rejection from 1.0327 resistance argues that USD/CHF is staying in a medium term sideway pattern. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone. Meanwhile firm break of 1.0342 will target 38.2% retracement of 1.8305 to 0.7065 at 1.1359.