USD/CHF Prepares for Potential Reversal

26 thg 10, 2023

USD/CHF Prepares for Potential Reversal.

The USD/CHF pair has encountered resistance near the key 0.9000 level as traders await the release of US Q3 Gross Domestic Product (GDP) data. The technical analysis reveals an interesting pattern, with price retracing to the 50% and 61.8% Fibonacci levels, signaling a potential reversal with a bullish impulse. An ABCD pattern has emerged, with the final target being the 1.272% Fibonacci extension.

Turning to the fundamental analysis, analysts at Wells Fargo predict a 5.0% annualized growth in real GDP for Q3. If this forecast proves accurate, it would represent a 3.0% increase on a year-over-year basis, surpassing pre-pandemic averages. A positive GDP report could significantly influence Federal Reserve (Fed) policymakers' decisions for the upcoming November 1 monetary policy meeting. With higher long-term bond yields, the Fed is widely expected to maintain the current interest rates in the range of 5.25-5.50%.

On the other side, the Swiss Franc has faced pressure, notably due to discouraging ZEW Expectations-Survey data. The survey indicates a deterioration in business and employment conditions for October.

Technically, the USD/CHF has experienced a bullish reversal, breaking out of the Inverse Head and Shoulders pattern on an hourly scale. However, it's currently testing a horizontal resistance level near 0.9000, which could serve as a significant turning point. Traders will be closely monitoring the upcoming US GDP data release, as it could shape the next moves in the USD/CHF pair.