USD/CHF extends gains above 0.99 ahead of FOMC minutes
|- US Dollar Index gains traction on Wednesday.
- Soft inflation data from the UK and the EU boost the demand for the buck.
- Coming up: Housing starts from the U.S. and the FOMC meeting minutes.
After ending the previous day with modest gains boosted by improved market sentiment, the USD/CHF pair preserved its bullish momentum on the back of a broad-based USD strength on Wednesday and broke above the 0.99 mark. As of writing, the pair was trading 0.9935, adding 0.27% on a daily basis.,
With today's macroeconomic data releases from the UK and the euro area both showing a slower-than-expected growth in inflation, investors turned their attention to diverging monetary policies between the Fed and other major central banks. The US Dollar Index, which tracks the greenback against a basket of six major currencies, rose to a six-day high at 95.43 and was last seen at 95.40, where it was up 0.33% on the day.
The economic docket in the U.S. will feature housing starts and building permits data. More importantly, the FOMC will publish the minutes of its September meeting later in the session. “In the US, the FOMC meeting minutes are on the calendar. The Fed remains on autopilot in terms of hikes, but we will look out for comments on balance sheet reduction plans and what the future monetary policy framework is going to look like,” Danske Bank analysts said.
Technical levels to consider
The initial resistance for the pair could be seen at 0.9955 (Oct. 9 high) ahead of 1.0000 (psychological level/parity) and 1.0065 (Jul. 13 high). On the downside, supports are located at 0.9900 (daily low), 0.9850 (Oct. 15 low) and 0.9790 (200-DMA).
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