- USD/CHF is seeing some selling on Wednesday amid modest dollar weakness.
- Encouraging US economic data fails to impress or lend support to dollar bulls.
- The decline appears cushioned ahead of the long-awaited FOMC decision.
The pair USD/CHF dipped during the early American session and is now flirting with the daily low, around the 0.9600 round level, or a multi-week low set on Monday.
The pressure on the pair comes as the US dollar dipped on Wednesday amid some repositioning trades ahead of the expected FOMC monetary policy decision. This is proving to be a key factor putting pressure on the USD/CHF pair for the second day in a row. The intraday decline does not seem to be affected by the US macroeconomic data, which was better than expected.
The US Census Bureau reported that durable goods orders rose 1.9%, far exceeding expectations for a 0.4% decline. Orders excluding transportation items also beat consensus estimates and rose 0.3% during the reported month. The data, however, did not impress dollar bulls.
That said, a combination of factors could offer some support to the USD/CHF pair and help limit the downside, at least for now. A good recovery in risk sentiment globally – as evidenced by the generally positive tone around equity markets – could undermine the safe-haven Swiss franc and act as a tailwind for the pair.
Investors also appear hesitant, preferring to wait for the outcome of the FOMC’s two-day policy meeting, to be announced later in the US session. The Fed is expected to raise rates by at least 75 basis points and leave the door open for further tightening, although markets remain divided on the need for more aggressive hikes.
Therefore, market attention will remain glued to the accompanying monetary policy statement and Fed Chairman Jerome Powell’s comments at the post-meeting press conference. Investors will be looking for new clues on the outlook for the Fed’s monetary policy in the near term, which, in turn, will influence the dollar and determine the short-term path of the USD/CHF pair.
Technical levels
Source: Fx Street
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