USD/CHF Continues to Surge: Factors Affecting the Pair's Momentu
USD/CHF Continues to Surge: Factors Affecting the Pair's Momentum
As the Asian trading session unfolds on Monday, the USD/CHF pair maintains its upward trajectory, hovering around the 0.9030 mark. This movement is particularly notable because it persists despite the somewhat lackluster performance of the US Dollar (USD) in recent times.
Our technical analysis provides interesting insights into the pair's behavior. We've observed a pullback in the price, occurring within the crucial 50% and 61.8% Fibonacci levels. What's more, this price action aligns perfectly with the dynamic moving average, which has acted as a strong support level. Based on these observations, we are now actively looking for a fresh long setup, supported by the gradual resurgence of the USD.
In the realm of fundamentals, the USD finds itself in an interesting situation. Market expectations point toward the likelihood of the US Federal Reserve (Fed) maintaining the current interest rates at 5.5% during the forthcoming meeting scheduled for Wednesday. This decision might temporarily restrict the USD's advances.
However, it's worth noting that the US Core Personal Consumption Expenditures Price Index (YoY) has witnessed a slight dip, falling from 3.8% in August to 3.7% in September. This decrease might create some headwinds for the USD/CHF pair. On the other hand, the monthly data for this index has shown a modest increase, rising from 0.1% to 0.3%, meeting the anticipated figures. Nevertheless, this uptick hasn't been sufficient to bolster the USD's performance significantly.
One external factor to consider is the ongoing escalation of the Middle East conflict. The conflict, specifically Israel's expansion of ground operations in Gaza and attacks on multiple Hamas sites, could potentially provide support for the Swiss Franc (CHF) as a safe-haven currency against the USD.
When we look at the broader picture, the US Dollar Index (DXY) seems to be maintaining a subdued presence. This is primarily due to the recent decline in US Treasury yields, which contributed to a temporary cool-down in the financial markets. However, it's essential to keep an eye on the 10-year US Bond yield, which is showing indications of a rebound, standing at 4.87% at the time of writing.
Turning our attention to the Swiss side of the equation, a recent ZEW Survey Expectations report has painted a rather somber picture. Switzerland's business conditions and labor market declined, with the October reading dropping to 37.8 from the previous 27.6.
As the week unfolds, investors will focus on several key events. In the US, the release of the ADP Employment Change and ISM Manufacturing PMI figures for October will be in the spotlight. On the Swiss economic calendar, the Real Retail Sales (YoY) data is scheduled for release on Tuesday. These events are poised to provide further insights into the factors influencing the USD/CHF pair's movements in the near future.
Our preference
Long positions above 0.90070 with targets at 0.9060 & 0.9075 in extension.
As the Asian trading session unfolds on Monday, the USD/CHF pair maintains its upward trajectory, hovering around the 0.9030 mark. This movement is particularly notable because it persists despite the somewhat lackluster performance of the US Dollar (USD) in recent times.
Our technical analysis provides interesting insights into the pair's behavior. We've observed a pullback in the price, occurring within the crucial 50% and 61.8% Fibonacci levels. What's more, this price action aligns perfectly with the dynamic moving average, which has acted as a strong support level. Based on these observations, we are now actively looking for a fresh long setup, supported by the gradual resurgence of the USD.
In the realm of fundamentals, the USD finds itself in an interesting situation. Market expectations point toward the likelihood of the US Federal Reserve (Fed) maintaining the current interest rates at 5.5% during the forthcoming meeting scheduled for Wednesday. This decision might temporarily restrict the USD's advances.
However, it's worth noting that the US Core Personal Consumption Expenditures Price Index (YoY) has witnessed a slight dip, falling from 3.8% in August to 3.7% in September. This decrease might create some headwinds for the USD/CHF pair. On the other hand, the monthly data for this index has shown a modest increase, rising from 0.1% to 0.3%, meeting the anticipated figures. Nevertheless, this uptick hasn't been sufficient to bolster the USD's performance significantly.
One external factor to consider is the ongoing escalation of the Middle East conflict. The conflict, specifically Israel's expansion of ground operations in Gaza and attacks on multiple Hamas sites, could potentially provide support for the Swiss Franc (CHF) as a safe-haven currency against the USD.
When we look at the broader picture, the US Dollar Index (DXY) seems to be maintaining a subdued presence. This is primarily due to the recent decline in US Treasury yields, which contributed to a temporary cool-down in the financial markets. However, it's essential to keep an eye on the 10-year US Bond yield, which is showing indications of a rebound, standing at 4.87% at the time of writing.
Turning our attention to the Swiss side of the equation, a recent ZEW Survey Expectations report has painted a rather somber picture. Switzerland's business conditions and labor market declined, with the October reading dropping to 37.8 from the previous 27.6.
As the week unfolds, investors will focus on several key events. In the US, the release of the ADP Employment Change and ISM Manufacturing PMI figures for October will be in the spotlight. On the Swiss economic calendar, the Real Retail Sales (YoY) data is scheduled for release on Tuesday. These events are poised to provide further insights into the factors influencing the USD/CHF pair's movements in the near future.
Our preference
Long positions above 0.90070 with targets at 0.9060 & 0.9075 in extension.
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