- The dollar rises for the third consecutive day and returns to levels above parity.
- Hopes of an aggressive interest rate hike by the Fed buoy the dollar.
- USD/CHF: The next targets on the upside are 1.0030 and 1.0145.
The US dollar appreciates for the third day in a row against the Swiss franc. The pair has extended its rebound from last week’s lows at 0.9840 to levels beyond parity, with the market focused on the Fed’s monetary policy meeting scheduled for this week.
Hopes of an aggressive hike by the Fed are buoying the dollar.
The focus of attention this week is the US Federal Reserve’s monetary policy decision on Wednesday. Everything points to a new rate hike of 0.75%, the fourth in a row, which has created a favorable scenario for the dollar.
On the macro calendar, the US Chicago PMI has shown that business activity deteriorated above expectations in October and so has the Dallas Fed manufacturing index. These figures have increased fears about a slowdown in economic activity in the last quarter of the year, although the impact on the US dollar has been small.
In Switzerland, retail sales increased at an annual rate of 3.2% in September, according to data from the Federal Statistical Office. This figure is slightly below the 3.3% expected by the market, but well above the 2.1% registered in August.
USD/CHF: Upside Momentum Rising Above 1.0000
From a technical point of view, the pair has confirmed its short-term uptrend by breaking above the 200-hour SMA at the 0.9980 zone, which now acts as support. To the upside, the pair is battling a resistance zone at 1.0030 (24.25 Oct highs) which would open the way to a 3-year high at 1.0145.
To the downside, the aforementioned 200-hour SMA at the 0.9980 zone is keeping the bears at bay. Below, the next potential targets are the 30th Oct low at 0.9945 and the 27th Oct high at 0.9920/25.
Technical levels to watch
Source: Fx Street
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