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The USDCHF Develops Ambiguous Trading

1/5/2023 10:46 AM

The US dollar showed mixed dynamics against the Swiss franc during the Asian session, consolidating near 0.9300. The day before, the US currency showed a rather noticeable decline, which was the market's reaction to the publication of uncertain macroeconomic statistics and the minutes of the December meeting of the US Federal Reserve.

The Manufacturing PMI from the Institute of Supply Management (ISM) in December corrected from 49.0 points to 48.4 points, which turned out to be lower than market forecasts at the level of 48.5 points, and the Manufacturing New Orders Index decreased from 47.2 points to 45.2 points, while analysts expected further growth to 48.1 points. At the same time, it should be noted that the ISM Manufacturing Employment Index in December showed an unexpected increase from 48.4 points to 51.4 points, with a negative forecast of a decline to 48.3 points. The minutes of the US Federal Reserve, in turn, indicated that the regulator does not plan to resort to easing monetary policy in 2023, hoping to achieve a steady decline in inflation to the target level of 2.0%.

At the same time, the franc received moderate support from new evidence of a further decline in consumer inflation in Switzerland. The December Consumer Price Index in annual terms slowed down from 3.0% to 2.8%, which was even lower than the 2.9% predicted by analysts, and in monthly terms the indicator fell by 0.2% after the zero dynamics in November.


Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is almost constant, remaining not spacious enough for the current level of activity in the market. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic is showing similar dynamics, but the line of the indicator is gradually approaching its highs, indicating the risks of overbought US dollar in the ultra-short term.

Resistance levels: 0.9300, 0.9350, 0.9400, 0.9478. | Support levels: 0.9250, 0.9200, 0.9150, 0.9100.


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