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USDCHF Correction after Renewing April Lows

12/12/2022 11:42 AM

After last week's decline, which resulted in renewed local lows from April 12, during the morning trading, the USD/CHF pair is trying to regain lost ground.

Market participants are taking profits on short positions ahead of a two-day meeting of the US Federal Reserve, which begins tomorrow. Investors expect interest rates to rise by only 50.0 basis points in response to a gradual reduction in consumer inflation. Also, renewed economic forecasts will be published, and the head of the regulator, Jerome Powell, is likely to try to calm the markets, confirming the previous benchmarks for the US economy. Before this event, experts will focus on the November data on consumer inflation, which will also be released on Tuesday: forecasts suggest that the monthly rate will accelerate from 0.4% to 0.5%, and the annual dynamics will remain close to the previous values of 7.7 %.

This week, the National Bank of Switzerland will also hold a monetary policy meeting on Thursday and, as analysts expect, will not bring anything new to the market. The previous meeting was held on September 22, and the interest rate was increased by 75.0 basis points to 0.5% per annum. The agency's experts expect a further weakening of the national economy against worsening foreign economic and foreign policy factors.

On the daily chart, Bollinger bands are moderately decreasing: the price range is expanding from below, letting the "bears" renew local lows. The MACD indicator shows poor growth, keeping an uncertain buy signal (the histogram is above the signal line). Stochastic keeps its downward direction, not reacting to the emergence of the "bullish" dynamics.

Resistance levels: 0.9400, 0.9478, 0.9550, 0.9600. | Support levels: 0.9350, 0.9300, 0.9250, 0.9200.

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