USD/CHF Holds Steady Above 0.9000 Amid Geopolitical Tensions and

31 thg 10, 2023

USD/CHF Holds Steady Above 0.9000 Amid Geopolitical Tensions and Fed Focus

In the fast-moving world of forex trading, the USD/CHF pair is currently commanding attention as it confidently hovers above the psychological resistance level of 0.9000. In the early European session, the pair's price stood at 0.90270, aligning with a previous prediction of a rebound at the 50% Fibonacci level, setting the stage for a potential bullish rally.

This resilient performance of the Swiss Franc against the US Dollar comes as investors turn their focus to the impending monetary policy decisions of the Federal Reserve (Fed), scheduled for Wednesday. The anticipation of this event has introduced a sense of caution into the market, with traders closely monitoring each development.

As traders prepare for the Fed's announcement, the Swiss Franc has its sights set on extending its gains, with 0.91475 serving as a reasonable initial target for those eyeing take-profit levels. However, there's a sense that the pair may have the potential to surge further, surpassing the previous swing high and breaking through the resistance area.

The broader context of the USD's performance, as indicated by the US Dollar Index (DXY), reveals its challenges in extending gains beyond the 106.40 mark. The neutrality in the anticipated interest rate decision from the Fed has tempered the DXY's momentum. Despite this, the overall outlook for the US Dollar remains somewhat hawkish, driven by strong indicators such as robust consumer spending, healthy labor market conditions, and glimpses of recovery in both the manufacturing and service sectors.

Market participants are keeping a watchful eye on the persisting excess price pressures above the 2% inflation target, as the US economy continues to show resilience even in the face of higher borrowing costs. It is this resilience that strengthens the argument for a hawkish guidance from the Fed. Moreover, the higher yields on US long-term bonds are providing the necessary leeway for Fed policymakers to maintain interest rates at their current levels, with 10-year US Treasury yields inching closer to 4.88%.

In conclusion, the USD/CHF pair's performance above the crucial 0.9000 level reflects its strength amid the backdrop of geopolitical tensions, including the situation in Gaza, and the impending Fed policy decision. With the potential for an extended bullish run, traders and investors are closely monitoring the market and waiting for crucial cues from the Fed's decision and the speech from SNB Jordan, making this an exciting and pivotal time in the world of forex trading.



Our preference

Long positions above 0.87550 with targets at 0.91475 & 0.93425 in extension.