Should we keep an eye on the direction of the U.S. dollar against the Swiss franc?

Should we keep an eye on the direction of the U.S. dollar against the Swiss franc?

25.07.2022

Last weekend, the U.S. dollar weakened against the Swiss franc, with the USD/CHF pair falling approximately 100 pips from 0.9704 to 0.9600. The USD/CHF has formed a triple top on the daily chart and is currently trending downward from the right shoulder.Although the pair rebounded during today’s Asian session, rising by about 50 pips, it remains below the 20-period moving average on the 4-hour chart. Therefore, we should remain cautious about the continuation of the downtrend following this corrective rally.

European currencies fell against the yen after preliminary manufacturing and services PMI figures for Germany, the eurozone, and the UK—released last weekend on the 22nd—showed a deterioration compared to the previous month.The euro fell against the yen by approximately 1.9 yen, from 140.671 to 138.773. The pound fell by 2.1 yen against the yen, dropping from 165.131 to 162.992. Economic sentiment is deteriorating across these countries, leading to a trend of yen buying.

Today, during European trading hours, the Turkish Economic Sentiment Index and Capacity Utilization Rate will be released at 4:00 PM, followed by the German IFO Business Climate Index at 5:00 PM, and Hong Kong’s trade balance at 5:30 PM.at 19:00, the UK CBI Business Survey, and during US trading hours at 21:30, the US Chicago Fed National Activity Index, at 23:30, the US Dallas Fed Manufacturing Activity Index, and at 02:00, the US 2-year Treasury auction.Tomorrow, the U.S. Consumer Confidence Index will be released, and the FOMC meeting is scheduled for the day after tomorrow. With attention focused on the U.S. dollar, we should remain cautious of volatility in the dollar until the FOMC meeting.