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The USDCHF Ends the Week with Multidirectional Dynamics

11/25/2022 11:32 AM

The American currency shows mixed trading dynamics paired with the Swiss franc, consolidating near 0.9430. The day before, the instrument slightly strengthened its positions, interrupting a two-day rally, which eventually provoked an update of local lows on November 16. The reason for the emergence of "bullish" dynamics were technical factors, while the market did not receive macroeconomic data, since American sites were closed the day before on the occasion of the Thanksgiving Day.

Earlier, the US currency was under pressure after the publication of the November minutes of the last meeting of the US Federal Reserve on monetary policy, in which traders saw signals for a gradual weakening of the "hawkish" position of the regulator. Officials are unanimous about the need to slow down interest rate growth, and in December we should expect an increase of only 50 basis points. Moreover, the minutes point to growing disagreement over the extent of the slowdown in economic growth amid a sharp increase in borrowing costs, while the risks of inflation, although showing a decrease, remain excessively high.

A small impact on the position of the franc the day before had macroeconomic statistics from Germany. Thus, the Business Climate index from the Institute for Economic Research (IFO) corrected from 84.5 points to 86.3 points, and the Economic Expectations index corrected from 75.9 points to 80.0 points, which also turned out to be better than analysts' forecasts at 77.0 points.

On the daily chart, Bollinger Bands are steadily declining. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is trying to reverse upwards but preserves its previous sell signal (located below the signal line). Stochastic is still showing a more confident downtrend; however, it is in close proximity to its lows, indicating the risks of the dollar being oversold in the ultra-short term.

Resistance levels: 0.9478, 0.9550, 0.9600, 0.9650. | Support levels: 0.9400, 0.9350, 0.9300, 0.9250.

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