Market Analysis

USDCHF: Preparing to break resistance toward 2018 high

The release of the Federal Open Market Committee (FOMC) Minutes yesterday showed that policymakers mainly anticipated that further gradual rate hikes would be consistent with a sustained economic expansion, strong labour market, and near-target inflation. Most of the members considered it appropriate to remove the reference in the statement to monetary policy is accommodative and saw little change in economic outlook, a few had said that data pointed to stronger growth than they had expected earlier this year.

On the other side of the Atlantic, the Swiss consumer price index fell to 1.0% year-on-year in September, comparing to the 1.2% registered in August and missing analysts’ estimates of a 1.1% rise. It was the lowest inflation rate since May 2018.

Since the beginning of October, the USDCHF gained almost 1.5% and potentially in an accumulation phase since early October.

During yesterday session, the currency pair rallied with a wide range and close near the high of the day, in addition, managed to close above Tuesday high, which suggests a strong bullish momentum.

The stochastic is showing a weak bullish momentum although is still above the 50 midline.

After a choppy consolidation in early October, the USDCHF seems to be warming up for a potential break of the daily resistance at 0.9970 and sail toward the year-to-date high at 1.0067. However, a breakout failure may wake up the bears and push the price back down on the road to a key level at 0.9760. The currency pair is trading above all three daily moving averages that should provide a dynamic a good support.


USD Swiss Franc US dollar FOMC USDCHF  ActivTrades

USD/CHF Daily Candlestick Chart


Written by Hugo O’Neill, External Analyst


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