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USDCHF Market Update

11/1/2022 1:37 PM

Before the US Fed meeting scheduled for tomorrow, the USD/CHF pair is actively adding in value and trying to consolidate above the 0.9950 level against the background of negative data on the economy of Switzerland and the eurozone.

Earlier, a report on the volume of retail sales in Switzerland was published: in September, the indicator grew by 3.2% in annual terms, which is still lower than the analysts' forecast of 3.5%, but higher than the previous value of 2.1%. Some pressure on the position of the instrument is also exerted by the difficult situation in the EU economy, where inflation was 10.7%, exceeding the preliminary estimates of experts at 10.2%, while gross domestic product (GDP) added only 0.2% in quarterly terms with an expected 1.0%.

Today, the attention of market participants is focused on the publication of the Purchasing Managers' Index (PMI) for October, which reflects the level of activity of purchasing managers in the manufacturing sector and is one of the important indicators characterizing the degree of confidence of large businesses in the economic development of the country. The indicator is expected to correct from 57.1 points to 56.0 points, and if the actual value is at or above this level, then we should expect the Swiss franc to strengthen and the USD/CHF pair to decline to 0.9950.

The most important event this week is the decision on the interest rate of the US Fed. The value is likely to increase by 75.0 basis points to 4.00%. Investors will carefully analyze the speech of the chairman of the department Jerome Powell, and if they find confirmation of further tightening of monetary policy in it, the USD/CHF pair may update the October maximum in the area of 1.0150.

The long-term trend remains upward. The growth target is the resistance level of 1.0050, in case of its breakout, the instrument will head to the area of 1.0150. When the price returns to the 0.9940 level, a correction will begin with a target at 0.9840.

The mid-term trend changed to a downward one last week after reaching the target zone 2 (0.9855-0.9842). Then the price corrected to the area of the key trend resistance 0.9998–0.9984, and if it is held, the downtrend will continue, and the minimum of last week will probably be updated.

Resistance levels: 1.0050, 1.0150, 1.0250. | Support levels: 0.9940, 0.9840, 0.9740.

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