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The USDCHF is Declining Amid the Release of the US Fed Minutes

11/24/2022 2:46 PM

This week, the USD/CHF pair resumed its decline and is currently testing 0.9400 (Murrey's level [1/8]).

The greenback is under pressure as investors expect the Fed's "hawkish" rhetoric to ease after domestic inflation showed signs of declining in October. The minutes of the last meeting of the regulator published yesterday confirmed this possibility: most officials of the department considered the slowdown in monetary policy tightening to be quite appropriate, which would allow for a more accurate assessment of the impact of measures already taken on the national economy and reduce the risks of instability in the financial system. The documents convinced investors that at the December meeting, the US Federal Reserve would increase the interest rate not by 75.0 basis points, as it was before but only by 50.0 basis points, which returned their interest in risky assets and forced them to abandon the American currency.

The franc also benefited from this, continuing to strengthen its position. The Swiss economy is also under pressure from the global crisis but looks more resilient than most European ones. The country's gross domestic product is slowing growth, although it has not yet turned to decline: in the second quarter, the figure was 0.3% QoQ and 2.8% YoY. At the same time, the labor market is stable, and the unemployment rate fell to 1.9% in October, while inflation shows signs of a slowdown in growth rates: from a peak of 3.5% in August, it fell to 3.0% by October. It gives investors hope that the country will be able to avoid a recession and further strengthens the position of the franc.

The trading instrument is testing 0.9400 (Murrey [1/8]), consolidation below, which will give the prospect of further decline to 0.9277 (Murrey [0/8]), 0.9155 (Murrey [–1/8]). If the level 0.9521 (Murrey [2/8]) is broken upwards, growth may resume up to 0.9765 (Murrey [4/8]), supported by the middle line of Bollinger Bands.

Technical indicators point to the continuation of the downward trend: Bollinger bands and Stochastic are directed downwards, while the MACD histogram is increasing in the negative zone.

Resistance levels: 0.9521, 0.9765. | Support levels: 0.9400, 0.9277, 0.9155.

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