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USDCHF Market Analysis

2/2/2023 10:55 AM

During the Asian session, the USD/CHF pair is declining, building on the "bearish" momentum formed on Tuesday and testing 0.9060 for a breakdown, renewing record lows of August 2021.

Strengthening of the downward dynamics is connected with yesterday's publication of the final minutes of the meeting of the US Federal Reserve: as expected, the interest rate increased by 25.0 basis points, slowing down the growth rate from 50.0 basis points. Fed's chairman, Jerome Powell, spoke out against a pause in the current tightening cycle, demonstrating his determination to stop soaring consumer prices.

Poor macroeconomic data exerted additional pressure on the positions of the US currency: manufacturing PMI from the Institute of Supply Management (ISM) in January fell from 48.4 points to 47.4 points, while the new orders decreased from 45.1 points to 42.5 points, contrary to forecasts of growth to 46.1 points.

Statistics from Switzerland also disappointed investors: the index of business activity from the National Association for the supply of materials and purchases (SVME) in January corrected from 54.1 points to 49.3 points, while analysts had expected it to rise moderately to 54.8 points.

On the daily chart, Bollinger bands are steadily declining: the price range is expanding but not as fast as the "bearish" dynamics develop. The MACD indicator is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic keeps a confident downward direction but is close to its lows, indicating that the US dollar may become oversold in the ultra-short term.

Resistance levels: 0.9100, 0.9150, 0.9200, 0.9250. | Support levels: 0.9036, 0.9000, 0.8960, 0.8925.

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