The USDCHF currency pair has recently tested July’s eight-year low, indicating a bearish trend in the market. Sellers have been dominating, but their hold on the market may be temporary. Core PCE inflation data, set to be released at 13:30 GMT, could potentially disrupt their current position.
Over the recent period, sellers have been able to exert their dominance in the USDCHF market. The currency pair has reached an eight-year low, which reflects the strength of the bearish trend. This bearish sentiment has been fueled by various factors, including a weakening US dollar, uncertain economic conditions, and the global impact of the COVID-19 pandemic.
The Potential Disruption: Core PCE Inflation Data
A potential disruption to the seller’s hold on the USDCHF market could come in the form of the upcoming release of Core PCE inflation data. The Core PCE inflation rate is a key indicator used by the Federal Reserve to gauge inflation levels and make monetary policy decisions. If the data deviates significantly from expectations, it could introduce volatility into the market and potentially weaken the sellers’ position.
The Sellers’ Short-lived Power
While sellers have managed to maintain their grip on the USDCHF market, it is unlikely that this power will last for long. The bearish trend, driven by global economic uncertainties, is gradually losing momentum. Moreover, the recent progress in COVID-19 vaccine development and the prospects of economic recovery have the potential to shift sentiment in favor of buyers.
As sellers continue to dominate the market, buyers patiently wait for an opportunity to enter with bullish momentum. The potential disruption caused by the Core PCE inflation data release could be the trigger needed for buyers to step in. If the data surprises positively, it could indicate a recovery in the US economy and prompt buyers to enter the market, reversing the current bearish trend.
The USDCHF currency pair is currently experiencing a bearish trend, with sellers exerting their power. However, this dominance might not last for long. The upcoming release of Core PCE inflation data could potentially disrupt the sellers’ hold on the market. Additionally, factors such as vaccine developments and economic recovery prospects have the potential to shift sentiment in favor of buyers. Therefore, while sellers currently have the upper hand, the balance of power in the USDCHF market may soon shift.