6) USDCHF

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

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

• Resistance: 0.9206, 0.9250, 0.9275
• Support: 0.9070, 0.9000, 0.8930

Yesterday the currency pair was very active having shot up 70 pips. The reason for this is the release of data on inflation in the United States, as well as a sharp demand for protection. Greed in the market by the end of yesterday has slightly decreased, here is the publication of a high inflation rate in the United States, as well as problems in China. The value of the Fear-Greed indicator is now 82

The gloomy mood was exacerbated by the news that the Chinese giant Evergrande is on the verge of default. Some bondholders did not receive coupon payments by the end of the 30-day grace period for coupon payments of more than $ 148 million on their bonds in April 2022, 2023 and 2024 at the time of the Asian business closure, and market negotiations hint that the DMSA prepares bankruptcy proceedings against the Evergrande Group. All of this led financial flows into safe-haven currency. As we recall, the statement by SNB board member Andrea Mehler, who said that market concerns, such as the situation with the real estate market and in particular Evergrande, may lead to an increase in demand for the Swiss franc as a protection.

However, it was revealed today that China Evergrande Group averted a destabilizing default at the last minute for the third time in the past month, with a source reporting that several bondholders received overdue coupon payments. Failure to pay could lead to a formal default by the company and cross-default on other Evergrande dollar-denominated bonds, exacerbating the debt crisis looming in the world's second largest economy.

It was also reported today that Chinese regulators have said they are considering supporting developers in order to avoid the collapse of the industry.
Also, do not lose sight of the appropriate timing of debt repayment of another Chinese giant Kaisa Group.

By and large, information about the intention of the Chinese government to support developers in order to prevent default slightly reduces the risks, but still. While we are watching the news from China.

According to macro data, Switzerland did not publish anything yesterday, but the most anticipated news of this week was published in the USA.
Yesterday, the US released important data on the CPI and the core CPI. Which showed the values ​​of 6.2% (y / y) in October and 4.6% (y / y) in October, respectively. And the value of 6.2%, by the way, is the highest level in more than 30 years. For the US dollar, this is a positive value, since the Fed will have to at least think about tightening monetary policy. Accordingly, the market reacted to this, as it should, financial flows from the US stock market flowed into the safe US dollar and treasury bonds.

However, if we consider the structure of inflation growth, then we can see that the key factors influencing the growth are the price of energy carriers and the shortage of chips. So even if the Fed begins to tighten monetary policy in 2022 earlier than planned, this will not affect the increase in chip production or the price of oil in any way. This is the conclusion reached by 11 Democratic senators who called on US President D. Biden to ban the export of crude oil and use the national reserve to stabilize the oil price.

Also yesterday, the labor market published slightly negative data on the total number of people receiving unemployment benefits, which exceeded the forecast and amounted to 2,160 thousand people, as well as the number of initial applications for unemployment benefits was higher than forecast, but better than last week. and amounted to 267 thousand people.

Now, in its upward movement, the currency pair rested on the upper level of the sideways level 0.9206 - 0.8940, in the short term, there is a possibility that the currency pair will return inside this sideways range.

Tomorrow we follow the publications from the US labor market, namely the number of open vacancies at JOLTS in September.

Now the currency pair is trading within a large sideways range between the levels of 0.9206 - 0.8940, where it was previously hovering for months. In terms of the prospects for the movement, as we noted earlier, as long as the currency pair is below the important resistance level of 0.9400, we will adhere to the idea that the market is sideways. Only on the breakdown of the level of 0.9400 can we say more confidently that the bulls have gained the upper hand in the currency pair.

The fundamental assessment speaks of an exclusively upward movement, here and a potentially tougher Fed than the SNB and the prospects that the Fed will begin a cycle of interest rate hikes in the foreseeable future, as well as the general attitude of the SNB to the national. currency.


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