- USD/CHF fell to 0.8930, with losses close to 0.64%.
- Fed Chair Powell confirmed that the Fed will act cautiously with an eye on rising bond yields.
- US jobless claims for the second week of October disappointed expectations.
On Thursday, the USD/CHF retreated and consolidated below the 200-day SMA, trading around 0.8935. On the US side, the USD faced selling pressure following Powell’s cautious words and failed to capitalize on better-than-expected jobless claims. On the other hand, the Swiss calendar had nothing relevant to offer.
Federal Reserve (Fed) Chairman Powell said the Treasury increase could exacerbate financial tightening, which could have implications for the next decision. That said, he confirmed the bank would proceed cautiously and left the door open to further tightening.
In terms of data, US jobless claims for the week ending October 13 stood at 198,000, below the expected 212,000 and the previous reading of 211,000. Looking at expectations, the 2.5-year and 10-year Treasury yields remain uncomfortably high for markets, around 5.18%, 4.97%, and 4.96%, respectively. Additionally, CME’s FedWatch tool indicates that the odds of an additional 25 basis point hike in December decreased from 40% to 30%. It should be noted that markets are underestimating the Fed. Still, recent data, including the acceleration of the Consumer Price Index (CPI) and better-than-expected economic activity reports, could push the Federal Open Market Committee to consider a further increase in rates.
USD/CHF Levels to watch
Analyzing the daily chart, it is seen that USD/CHF has a neutral to bearish technical stance, with the bears gradually recovering and firming. The Relative Strength Index (RSI) is sloping negatively in bearish territory, while the Moving Average Convergence Histogram (MACD) features rising red bars. Furthermore, the pair is below the 20-day and 200-day SMA, but above the 100-day SMA, highlighting that despite sellers gaining ground, there is some of light for buyers on the broadest scale and that bears must redouble their efforts to confirm a downtrend.
Support levels: 0.8930, 0.8915, 0.8900 (100-day SMA).
Resistance Levels: 0.9015 (200-day SMA), 0.9040, 0.9070.
USD/CHF Daily Chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
