USD/CHF Analysis Report:

Oct 31, 2022

VOT Research Desk

The market is concentrating on the Fed’s monetary policy meeting, which is scheduled for later this week. As a result, the US dollar is strengthening for a third straight day versus the Swiss franc, extending its recovery from last week’s lows at 0.9840 to levels over parity.

One of the highlights of the week for investors will be the US Federal Reserve’s announcement on monetary policy on Wednesday.

The US currency, which is strengthening versus its key competitors, would benefit from another rate increase of 0.75%, which is what all indications point to.

According to the macroeconomic calendar, the US Chicago PMI and Dallas Fed Manufacturing Index both reveal that business activity declined more than expected in October.

Despite the fact that the impact on the US dollar has been minimal, these numbers have raised concerns about a slowdown in economic activity in the final quarter of the year.

The Swiss Federal Statistics Office’s data shows that retail sales in Switzerland climbed at a 3.2% annual rate in September. This number is substantially above the 2.1% reported in August but just below the market expectation of 3.3%.

USD/CHF Technical Analysis

Technically, the pair has broken through the 200-hour SMA in the 0.9980 region, which is now serving as support, confirming its near-term bullish bias.

The pair is straining against a resistance level at 1.0030 (highs of October 24, 25), which would clear the way for a three-year high at 1.0145, on the upside.

On the downside, bears are being held at bay by the indicated 200-hour SMA near the 0.9980 region.

The low on October 30 at 0.9945 and the high on October 27 at 0.9920/25 are the next possible targets down below.