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  • USD/CHF will now depend on the outcome of the ECB.
  • Dollar is higher on the day despite last week’s NFP disappointment.  

USD/CHF has been on the front foot at the start of the week, extending last week’s bid within the ascending channel formed mid-August. The pair currently trades at 0.9902 having ranged between 0.9870 and 0.9915, up +0.31% on the day so far.  

The Swiss franc is in focus this week as markets look to the European Central Bank meeting and ponder as to what the next move from the Swiss National Bank will be. The SNB will be  seeking to maintain the EUR/CHF cross at competitive levels for its export market to European nations – Indeed, there have already been signs that the SNB has recently intervened in the FX market have distorted demand for the CHF – CHF net shorts pulled back a little ground having dropped heavily the previous week on increased demand for safe-haven assets.  

Dollar remains robust despite NFPs disappointment

As to the Dollar, bulls displayed a strong start to last week, with a break through 99 the figure, although ran into supply at the midpoint of the handle. In the lead into the highly anticipated Nonfarm Payrolls, the Dollar was a figure lower down at 98.50 but tested the bull’s commitments on the disappointments in the report. The 98 handle has so far proven resilient and today the Dollar is higher by 0.20% so far having ranged between 98.14 and 98.51.  

ECB will take the spotlight

The week ahead has a number of key vents, including the ECB which is likely to be the main event, (besides Brexit headlines or pending potential statement from Trump).  

“if the ECB is really serious about closing the gap between inflation expectations and its own target, anything else but a big package can be the outcome of Thursday’s meeting,” analysts at ING Bank argued.  

“The costs of waiting or only delivering parts of a big package and then trying to get ahead of the curve at a later stage will be higher – an experience eurozone policymakers have had quite a few times during the last ten years. This might be his last stunt but we expect Mario Draghi to conquer the barricades once again and put on his Super Mario costume one last time on Thursday.”

USD/CHF levels

USD/CHF has climbed from the depths of the 97 handle to the 0.99 handle in a steep accenting channel and is en route to the 200-day moving average at 0.9950. Bulls will be now looking to base above the late March lows just below 0.99 the figure.