. USD/CHF Declines Amid Fed Rate Uncertainty - Capital Street FX

USD/CHF Declines Amid Fed Rate Uncertainty – Capital Street FX

USD/CHF Declines Amid Fed Rate Uncertainty – Capital Street FX

16 Oct 2023

USD/CHF holds its lead over the major level at 0.9000 ahead of US Retail Sales.

FUNDAMENTAL OVERVIEW

  • The USD/CHF continues to decline due to the Fed’s interest rate uncertainty.
  • Due to risk aversion over the Middle East war, flows into the safe-haven Swiss franc have increased.
  • The US dollar’s losses might be restricted by the increase in US bond rates.

For the second straight day, the USD/CHF pair continued to decline. The future interest rate choices of the Federal Reserve (Fed) are still up in the air, which is making the atmosphere surrounding the US dollar (USD) unstable and confusing.

Furthermore, the Swiss Franc (CHF) seems to be receiving buying support amid the military conflict in the Middle East, as the currency is considered a safe haven during times of geopolitical uncertainty. Investors seeking refuge in a stable and secure currency may be contributing to the strength of the CHF in the current geopolitical landscape.

The increase in bond yields, which has tightened financial conditions and signaled a possible delay in a rate hike for November, is hurting the USD/CHF pair.

The USD/CHF pair and market dynamics may be impacted by the US Retail Sales (MoM) data, which is expected to show a 0.2% increase in September compared to the prior reading of 0.6% on Tuesday.

USD/CHF TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

USD/CHF is currently trading within a down channel.

USD/CHF is positioned below all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the selling zone, while the Stochastic oscillator suggests a Negative trend.

Immediate Resistance level: 0.9080

Immediate support level: 0.8997

HOW TO TRADE USD/CHF

Following a rapid increase, the price of USD/CHF reversed, formed a double-top pattern, and has since been trading in a downward channel. The price is currently trading at a significant support level; further declines are likely if this support zone breaks down.

TRADE SUGGESTION- STOP SELL– 0.8980, TAKE PROFIT AT- 0.8899, SL AT- 0.9044.