Fundamental Analysis of USD/CHF for February 28, 2019

Investors are selling USD because it lost shine due to some weighty factors while. However, some economic data confirms steady economic growth with solid employment. In the course of the painstaking trade talks between the US and China on import tariffs, CHF managed to gain momentum with positive economic reports published recently.

Recently FED's Chairman Jeromy Powell stated that the regulator decided to halt tapering its $4 trillion balance sheet later this year. According to Powell, they have already worked out a plan to normalize a balance sheet which will leave it at 16 to 17 percent of GDP which is up from 6 percent since the financial crisis a decade ago. Today US Advance GDP report is going to be published which is expected to drop to 2.2% from the previous value of 3.4%, Advance GDP Price Index is expected to edge down to 1.7% from the previous value of 1.8%, and Unemployment Claims is expected to increase to 221k from the previous figure of 216k.

On the CHF side, recently Credit Suisse Economic Expectation report was published with an increase to -16.6 from the previous figure of -44.0 which contributed to CHF growth. With such solid support, CHF is expected to gain ground further. Today Switzerland's GDP report is going to be published which is expected to expand to 0.4% from the previous value of -0.2% and KOF Economic Barometer is expected to increase marginally to 95.2 from the previous figure of 95.0. Besides, Retails Sales report is due tomorrow which is expected to increase to 0.3% from the previous value of -0.3%. In this context, CHF has weighty reasons to maintain momentum if positive forecasts some true.

Meanwhile, CHF enjoys strong fundamentals while USD is struggling for gains. On the whole, the currency pair aims to retain the bullish momentum. Until the US comes up with better than expected economic results, CHF is likely to extend gains.

Now let us look at the technical view. After the price formed Bearish Continuous Divergence and reached the 61.8 Fibo expansion level, the bearish pressure has extended quite strongly. So, the price is expected to move lower towards 0.9950 and later towards 0.9850 in the coming days. As the price remains below 1.00 area with a daily close, the bearish bias is expected to continue.

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The material has been provided by InstaForex Company - www.instaforex.com

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