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USDCHF Market Update

3/22/2023 10:44 AM

During the Asian session, the USD/CHF pair is correcting after yesterday's negative dynamics amid reduced investor activity, awaiting the outcome of the US Federal Reserve's monetary policy meeting. Also, speeches by representatives of the European Central Bank (ECB), including its head, Christine Lagarde, are scheduled today.

According to forecasts, the US regulator will raise interest rates by 25.0 basis points but at the same time, it will be forced to choose between financial stability and reducing price pressure, which remains well above the chosen target levels. This option seems to be the most rational, as it will prevent negative investor sentiment that may arise when pausing the monetary policy tightening cycle. After the bankruptcy of several American banks, market participants do not trust the statements of the US Federal Reserve and the Treasury Department that the situation is under complete control. Meanwhile, the media reports that the country's authorities are considering the possibility of temporarily extending insurance conditions to all deposits, and not just those that are limited to 250.0K dollars.

On Thursday, the National Bank of Switzerland (SNB) will hold a meeting on the interest rate. The forecasts are quite unambiguous and assume that the indicator will remain unchanged at 1.0%, especially since the inflation rate in the country remains quite low. Analysts continue to discuss the takeover by UBS Group AG of its competitor Credit Suisse Group AG for 3.0B francs. The merger, which is scheduled to be completed this year, will be carried out without the approval of the shareholders of both banks but with the financial support of the government, which will allocate 9.0B francs to the buyer to cover possible losses. Meanwhile, the share of the largest investor in Credit Suisse Group AG, Saudi National Bank, has lost about 80.0% of investments since the acquisition in November 2022 of a 9.9% stake for 1.4B Swiss francs.

On the daily chart, Bollinger bands are decreasing: the price range narrows slightly, remaining quite spacious for the current level of activity in the market. The MACD indicator reverses into a downward plane, forming a new sell signal (the histogram is trying to settle below the signal line). Stochastic is falling more confidently, being in the center of its working area.

Resistance levels: 0.9258, 0.9300, 0.9350, 0.9400. | Support levels: 0.9200, 0.9150, 0.9100, 0.9070.

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