FxWirePro- USDCHF Daily Outlook

USDCHF trades high for the fourth consecutive day on positive US economic data. The producer price index rose to 6% YoY, well above an estimated 5.6%.  The inflation for the month of Jan increased by 0.70% monthly basis vs an estimated 0.20%. It hits an intraday high of 0.93040 and is currently trading around 0.9290.

The number of people who have filed for unemployment benefits dropped by 1000 to 195K, compared to a forecast of 200K.

 According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb jumped to 81.9% from 90.80% a week ago.

  The US 10-year yield trades higher on hot inflation data. Any daily close above 3.95% targets $4.30%. The US 10 and 2-year spread narrowed to -76 basis points from -88% bpbs.

 Technically in the 4-hour chart, the pair is holding above short-term (21  and 55 EMA) and above long-term 200 EMA (0.92400). Any break above 0.9300 confirms further bullishness, a jump to 0.9360/0.9410 is possible.

 The near-term support is around 0.9240 and any breach below targets is 0.91980/0.9130. Significant bearish continuation only if it breaks 0.9050.  

Indicators (4-hour chart)

CCI (50)- Bullish

ADX- Bullish

It is good to buy on dips around 0.9289-90 with SL around 0.9240 for the TP of 0.9400.