U.S. Debt Markets See Action: USD/CHF In Focus

Today’s U.S. Treasuries auction has brought a few surprises. Investors have taken notice of the debt market, with growing yields in the 6-month bill and 3-year note auctions. With the 10-year note auction coming up at 1:00 PM EST, it appears as if the markets are pricing a March 21 FED rate hike into valuations.

The CME FedWatch index is assigning an 86% chance of rates going up next Wednesday. This is the popular sentiment and current consensus opinion.

USD/CHF Technicals

After a great open to 2018 for safe-haven currencies, the USD is posting a comeback. The USD/CHF has rallied off of yearly lows over the past several weeks, to trade at the .9500 handle.

Sometimes technical analysis can be incredibly simple. When looking at the USD/CHF daily chart, .9500 is the key number driving participation.

Here are the levels to watch for the USD/CHF as we kick off the forex week:

• Resistance(1): Psyche Level, .9500
• Support(1): Bollinger MP, .9417

Overview: As I mentioned in an earlier update, patience is a virtue. Ranges across the forex are tight — it may take some time for these markets to open up.

For now, I expect the Swissie to remain in a consolidation phase between the .9400 and .9500 handles. Thursday will be a big day for the USD/CHF, as the Swiss National Bank (SNB) is to announce their interest rate decision. Rates are expected to be held at -0.75%. In the event that there is a surprise, the likelihood of a directional move will be heightened.