USD/CHF – Unemployment rate failed to weaken CHF

Swiss Unemployment in January hit 3.4%, equaling a 2.5 year high as the number of of jobless increased by 4,878 to 201,776 people. Seasonally adjusted figures were slightly lower, coming in at 3.1% but Dec’s S.A numbers were adjusted higher to 3.1% as well. USD/CHF appears to be muted but price managed to starve off a small decline, keeping 0.9170 intact.

Shortly after, Retail Sales was announced, and ended the short reprieve the bulls were enjoying. Y/Y numbers are much stronger than anticipated, with a 5.1% print vs an initial estimate of 3.2% and 2.9% previous. There appears to be more traction with this data release with prices continuing its previous downtrend to break 0.9170 as CHF strengthens on the back of the strong figures.

Hourly Chart

A break of 0.9170 does not negate the short-term uptrend that we’ve seen from the 0.907 bounce. Price may find some support around 0.913 – 0.915, and should it recover from here, we could see a renewal of bullish sentiment once more. This scenario is corroborated with Stochastic readings approaching Oversold region with a Stoch/Signal cross imminent. Nonetheless, a break below 0.913 will signal further bearish momentum towards 0.907 in the short-term.

Daily Chart

Daily Chart shows price pulling back to the downward trendline after an initial bearish acceleration below 0.922. Stochastic is also showing a bullish signal with the Stoch/Signal cross and current readings above 20.0, the benchmark for Oversold. As current candle still have some distance away from the trendline, we could still see further bullish reversal to touch the trendline or test 0.922 again even. However as we are currently in a downtrend (from Nov 14th decline), trend traders should ideally look out for selling opportunities rather than simply buying at current levels based on what Stochastic is saying. Watch for any bearish candlestick patterns/ indicator signals should price recovers higher from here and that could give bearish traders better prices to short into instead.

Fundamentally, it is important to note that the better than expected Retail Sales did not truly invoked a strong reaction. USD/CHF appears to be mostly immune to Swiss economic data, and instead is more sensitive towards global risk trends and USD direction rather than CHF in itself.

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