FOREX: Safe Haven Demand Boosts CHF, GBP Pressured
Feb-27 18:11
- The Swiss Franc is standing out today, one of the clear outperformers in G10 alongside the Norwegian krone. Friday’s price action has seen EURCHF (-0.50%) extend below the 0.91 handle and print a fresh cycle low at 0.9061, while USDCHF has also declined 0.7, comfortably back below 0.77.
- SNB President Schlegel kept the language around FX interventions consistent with prior rhetoric when he spoke earlier in the week, potentially bolstering the bullish tilt from most recent analyst views. This is highlighted by Morgan Stanley who call for a move to 0.8700 in EURCHF.
- Furthermore, safe haven flows related to US/Iran tensions may be benefitting the Franc, which provides a cleaner alternative to the JPY given the ongoing political/fiscal drivers in Japan which are driving yen sentiment. CHFJPY has risen back to 203.00 as we approach the weekend close.
- Another chart that stands out is GBPCHF, which has broken below 1.0360 to reach the lowest levels since 2022. Sterling weakness has been assisted by political factors, as the fallout from the labour party’s third place in the Gorton and Denton by-election is assessed, with pressure likely to build on UK PM Starmer.
- Notably, EURGBP has risen a further 0.35% today, printing a high of 0.8789. 20- and 50-day EMA supports have held very well this week, and a resumption of strength has assisted the cross towards the next notable chart point at 0.8797, the Dec 17 high.
- Elsewhere, pressure on major equity benchmarks has had little impact on the resilient AUDUSD, which continues to hover below a cluster of resistance between 0.7130/58, a break of which would place the pair at its highest point since mid-2022.
- In Canada, higher-than-expected December growth data offset a lower-than-forecast Q4 annualized print. Softer dollar dynamics then allowed USDCAD to edge lower, distancing itself from a key 1.3725 pivot that has continued to cap gains across the week.
- Monday’s calendar is highlighted by US ISM Manufacturing PMI, and the focus next week will be on Friday’s US employment report.
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FED FUNDS FUTURES: BLOCK: Large Feb'26 Contract Sales
Jan-28 18:07
- Total of -64,000 FFG6 (53k at 96.365, 11k at 96.36) at 1246:07ET, contract trades 96.365 last (-.005)
FED: Statement: Limited Expectations For Guidance Tweaks (2/2)
Jan-28 18:03
- In changing the Statement to announce the rate hold at 3-1/2 to 3‑3/4 percent, the FOMC is expected to also retain the forward guidance language which continues to provide flexibility without guiding markets to any particular outcome.
- The Statement added “extent and timing” to "additional adjustments" in the December statement to signal that after 3 consecutive cuts, the easing bias remains but the pace has slowed and the next move will be data-dependent.
- We've seen some expectations that guidance could be tweaked slightly: for example, removing "additional" from the reference to adjustments (JPMorgan). Additionally we wouldn't be too surprised by the reference to "the shift in the balance of risks" to be removed (Wells Fargo).
- The paragraph on reserve management purchases will be deleted.
- MNI’s Instant Answers questions for the meeting include a tally of dissenters.
- We’d be surprised if there were any dissenters apart from Gov Miran who has dissented in favor of a larger 50bp cut at each of the meetings he’s participated in since September 2025. He said after the December meeting that he hadn’t decided on whether he would support a 25bp or a 50bp cut in January, but he is eyeing 150bp of cuts in 2026 and it’s clear he will deliver a dovish dissent all the same. Gov Bowman is an additional possibility to deliver a dovish dissent, with some seeing Gov Waller joining them.
- The Implementation Note could at some point include a tweak of administered rates, including a nudge lower in the interest rate paid on reserve balances from the current 3.65%, or the standing repo facility rate of 3.75%. We include these in our Instant Answers, just in case - we don’t expect any move at this meeting (and as far as we can tell, neither does any analyst).
EURUSD TECHS: Off Highs, But Bull Cycle Persists
Jan-28 18:00
- RES 4: 1.22736 2.236 proj of the Nov 21 - Dec 16 - Jan 19 swing
- RES 3: 1.2218 High Jun 15 2021
- RES 2: 1.2147 High Jun 16 2021
- RES 1: 1.2081 High Jan 27
- PRICE: 1.1941 @ 17:05 GMT Jan 28
- SUP 1: 1.1938 61.8% retracement of the Jan 27 high - low range
- SUP 2: 1.1850 Low Jan 27
- SUP 3: 1.1747 20-day EMA
- SUP 4: 1.1704 50-day EMA
A strong bull cycle in EURUSD remains in play, although prices have faded off the cycle high printed on Tuesday. Note that the uptrend is in an extreme overbought position and this highlights the risk of a corrective pullback - to unwind the overbought reading. The firm support to watch is at the 20-day EMA, at 1.1747. For bulls, a continuation higher would open 1.2147 next, the Jun 16 2021 high.
