- Hopes about peace talks and China’s stimulus measures have lifted market sentiment.
- USD/CHF is teetering above trend line support at 0.9390.
The US dollar rally from early March lows near 0.9150 appears to have run out of steam. The pair USD/CHF has been trading sideways around 0.9400 on Wednesday, drifting as investors focus on the conclusion of the Fed’s monetary policy meeting.
The dollar loses strength in a session of risk appetite
Financial markets are seeing some revival of risk appetite on Wednesday, with Asian and European stock markets posting solid gains. Upbeat news of the Russia-Ukraine peace talks and the announcement of further economic stimulus in China have buoyed stock markets, favoring the euro and pound and weighing on the USD, despite market expectations of a rally. rate from the Fed later today.
Russian Foreign Minister Sergey Lavrov said Wednesday that he is hopeful of a mutual compromise. At the other end of the table, Ukrainian Prime Minister Volodymyr Zelensky said the talks sound more realistic, although more time is needed. These comments have raised optimism for a deal that could end the war.
In China, Vice Premier Liu He announced that Beijing is ready to implement measures to support economic growth and keep capital markets stable. This has increased confidence among Asian investors.
USD/CHF stumbles above 0.9400, testing trend line support
From a technical perspective, the pair is now teetering just above trend line support from the early March lows now at 0.9390.
A confirmation below that line could cancel the short-term bullish momentum and send the pair towards the 100hrs SMA at 0.9360, which has previously offered support, before targeting the 14 Mar low at 0.9320.
On the upside, immediate resistance lies at 0.9415, and above here 0.9430 (15 Mar high) before setting sail to attack the April 2021 high at 0.9470.
USD/CHF hourly chart
Additional technical levels
Source: Fx Street
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