USDCHF showed a nice pullback after the US CPI data. The yearly inflation declined to 6.4%, slightly above the forecast of 6.4%. Month on Month on Month, CPI was 0.50%, compared to an estimate of 0.40%. It hits an intraday low of 0.91360 and is currently trading around 0.91980.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb declined to 90.8% from 96.70% a day ago.
The US 10-year yield recovered sharply after mixed US CPI data. Any close above 3.75% targets $3.95%. The US 10 and 2-year spread widened to -86 basis points from -76% bpbs.
Technically in the 4-hour chart, the pair is holding below short-term (21 and 55 EMA) and above long-term 200 EMA (0.92434). Any break below 0.9150 confirms further bearishness, a dip to 0.91200/0.9080 is possible.
The near-term resistance is around 0.9240 and any breach above targets is 0.9300/0.9360. Significant bullish continuation only if it breaks 0.9400.
Indicators (4-hour chart)
CCI (50)- Bearish
ADX- Neutral
It is good to buy on dips around 0.9150 with SL around 0.9100 for the TP of 0.9240/0.9260.
