In November, the USD/CHF pair formed a narrow downward channel, within which it is now.
Last week, the price reached year's lows around 0.9060 against the results of the US Federal Reserve meeting: the regulator slowed down the pace of interest rate increases from 50.0 to 25.0 basis points, and its chairman Jerome Powell noted the beginning of disinflation and said that the country's economy could avoid a serious economic downturn, which returned investors' interest in risk and strengthened the position of assets alternative to the dollar. On Friday, the quotes resumed growth, rising to 0.9277 (Murrey level [4/8], the upper line of Bollinger bands) after the publication of strong January data from the US labor market: non-farm payrolls increased by 517.0K, while unemployment decreased to 3.4%. Since it has not yet been possible to reduce activity in the sector, the prerequisites for a resumption of inflation growth remain, and the regulator may maintain high interest rates longer than planned. Currently, the course is in a state of uncertainty as investors await Jerome Powell's speech to the Washington Economic Club today: the official may clarify the agency's next steps and hint at the timing of the curtailment of the monetary tightening cycle.
The Swiss economy remains resilient amid the current crisis, with the gross domestic product (GDP) slowing to 0.5% in the third quarter but expected to pick up 1.0% in the fourth. The Swiss National Bank (SNB) raised its interest rate to 1.00%, which brought inflation down from its September peak of 3.5% to the current 2.8%, close to the target. Globally, the franc will continue to strengthen. However, in the short term, much of the movement of the USD/CHF pair will depend on the comments and actions of US Federal Reserve officials.
The trading instrument is at 0.9277, consolidation above, which will lead to the price going beyond the downward channel and rising to 0.9521 (Murrey level [6/8]) and 0.9643 (Murrey level [7/8]). The key "bearish" level is 0.9155 (Murrey's level [3/8]), the breakdown of which will give the prospect of a decline to 0.9033 (Murrey's level [2/8]), 0.8911 (Murrey's level [1/8]).
Technical indicators confirm the continuation of the downward trend: Bollinger bands are reversing downwards. Stochastic is pointing upwards but is approaching the overbought zone, which limits the prospects for further growth.
Resistance levels: 0.9277, 0.9521, 0.9643. | Support levels: 0.9155, 0.9033, 0.8911.