- First quarter GDP data crossed market consensus on the upside.
- Traders showed little reaction as all eyes are on the return of the US players from holiday.
Despite better than expected Swiss GDP numbers, the USD/CHF showed little reaction to the data as it trades near 1.0040 while heading into the European open on Tuesday.
Switzerland’s first-quarter (Q1) 2019 gross domestic product (GDP) grew 1.7% versus 1.0% forecast and 1.5% prior growth (revised) on YoY basis. The growth figure flashed seasonally adjusted mark of 0.6% on a quarterly basis compared to 0.4% market consensus and 0.3% previous revised readout.
The pair recovered on Monday as the US Dollar (USD) ruled despite the absence of the US traders, due to the Memorial Day holiday, mainly because of the EU election results.
Having witnessed initial reaction to Swiss GDP, traders may now focus on second-tier data from the US. Among them, the S&P/Case-Shiller home price indices, consumer confidence, and the Dallas Fed manufacturing business index could generate headlines. While the housing market indicator is expected to soften from 3.0% growth to 2.8% previous readings of consumer sentiment index and manufacturing gauge point towards a weak trend.
Additionally, the US traders’ return from the holiday will also affect near-term market sentiment and hence will be observed closely in association with global trade and political news reports.
While 100-day simple moving average (SMA) at 1.0030 acts as immediate downside support, 1.0000 and 0.9970 can try limiting additional decline ahead of highlighting 0.9955 rest-point comprising 200-day SMA.
Alternatively, 50-day SMA level of 1.0075 may question the pair’s nearby upside, a break of which should escalate the recovery towards multiple highs marked during mid-month near 1.0120/25. Also, 1.0160 and 1.0220 can entertain bulls past-1.0125.