6) USDCHF

Technical Analysis (MA, RSI, STOCH, MACD, ADX)

• M30 - DOWN
• H1 - UP
• H4 - RANGE
• D1 - RANGE
• W1 - DOWN
• MN - DOWN

• Resistance: 0.9270, 0.9350, 0.9400
• Support: 0.9100, 0.9070, 0.9000

The currency pair continued trading sideways yesterday. In which the couple has been stuck since the beginning of December last year. Such a movement is associated with a number of factors, here is the continuing thin market, a change in investor sentiment towards risk, and the main thing is the prospects for the SNB's actions on persistently high inflation. The sharp demand for risk, which we have seen since the beginning of the year, does not yet allow us to speak of a change in sentiment, however, the value of the Fear-Greed indicator indicates that the market phase is already Risk-ON, and the value for the total for yesterday remained at the level of 68.

In terms of fears, everything seems to be normalizing. The market overcomes fears of Omicron. To date, several studies have shown that while Omicron is indeed more infectious than the previously dominant Delta and better able to “evade the protection” afforded by vaccines, it also causes, on average, milder disease.
The US Department of Health said yesterday that the number of daily infections jumped to 1 million on Monday, with the majority of infections attributable to the Omicron strain. This surge was expected as most Americans traveled and gathered in large groups during their vacations.

If everything is more or less clear with Omicron, then the real estate market in China has not yet stabilized. The problems with China Evergrande are not over yet. After the Chinese real estate giant Evergrande Group defaulted last month, the problems for the debtor company are far from over. Evergrande announced on Monday that it has suspended trading in its shares in Hong Kong as investors await news of its restructuring plan.

Late Monday night, Evergrande confirmed that it had received an order from the authorities in Danzhou City, Hainan Province on December 30 to demolish 39 buildings that were being built as part of the Ocean Flower Island project. China Evergrande plans to hold a meeting with bondholders January 7-10 to vote on proposals, including moving the maturity date of some bonds to July 8 from January 8. This came after protesters gathered outside the Evergrande offices in Guangzhou, demanding that the debtor developer return their money. So it's too early to say that all the fears that haunted the market last year remained in 2021.

On the other hand, leading European economists continue to see prospects for the strengthening of the Swiss franc. It is noteworthy that this is no longer associated with risk aversion, but is associated with an increase in the short-term inflation forecast of the SNB to 1.0% in 2022 from 0.7% earlier, which leaves room for the SNB to maintain a stronger Swiss franc to counter growing inflationary pressures. This confirms the idea that the SNB will continue to refrain from intervening in the near future. Yesterday, this assumption was further reinforced by a strong consumer price index in Switzerland for December at 1.5% y / y.

No important macro data was released in the US yesterday. Although the US dollar remains under mild pressure due to a global decline in demand for protection. However, the growing yields on US bonds continue to support it, which limited the currency pair's fall. The yield on 10-year US bonds is approaching the 1.7% level, which serves as the last hurdle before the 2021 high of 1.77%.

Next, today we are waiting for the publication of the first in a series of important monthly reports from the US labor market, namely, Change in the number of people employed in the non-agricultural sector from ADP for December. Also today will be published minutes of the FOMC meeting, the so-called minutes.

Tomorrow:
- The number of initial claims for unemployment benefits in the United States - 16:30 Moscow time
Friday:
- Change in the number of employees in the nonfarm sector (Dec) 16:30 GMT - NFP
- US Unemployment Rate Dec 16:30 UTC

We expect that the Fed's monetary tightening will tend to boost not only short-term, but also medium and long-term US yields over 2022. We also expect the yield curve on the 2-10 year bonds to flatten out. It is possible that the yield on 10-year US Treasuries will rise to 2% by the end of 2022. The rise in Treasury yields will lead to a steady rise in the US dollar. All this makes the upward direction the main one in the medium and long term.

In order to be sure that the currency pair has returned to the trend state, it is necessary to see a breakdown of the important resistance level of 0.9400. By the breakdown of which, we can more confidently say that the bulls gained the upper hand in the currency pair, and the currency pair came out of the side in which it was hanging for months.

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