USD/CHF Price Analysis: Trades sideways above 0.8800, FOMC minutes in focus
|- USD/CHF consolidates in a tight range above 0.8800 as the focus remains on FOMC minutes.
- The SNB may lead the rate-cut cycle as inflation has been under 2% consecutively for the last eight months.
- Uncertainty ahead of FOMC minutes brings some strength to the US Dollar Index.
The USD/CHF pair oscillates in a narrow range slightly above the round-level support of 0.8800 in the London session on Wednesday. The Swiss Franc asset struggles for a direction as investors await the release of the Federal Open Market Committee (FOMC) minutes, which are scheduled at 19:00 GMT.
The FOMC minutes for the January policy meeting will provide more insights about the timing of long-awaited rate cuts. More clarity of rate-cut timing would improve the appeal for risk-sensitive assets.
Meanwhile, the US Dollar Index (DXY) has delivered a solid recovery move after refreshing its weekly low near 103.80. 10-year US Treasury yields that determine market expectations for interest rates have rebounded to 4.28%.
The Swiss Franc is broadly downbeat as the Swiss National Bank (SNB) appears to lead the rate-cut cycle due to easing price pressures. The annual inflation rate in the Swiss economy has remained below 2% for the last eight months, indicating the achievement of price stability.
USD/CHF trades sideways in a narrow range of 0.8795-0.8838 on an hourly scale. A sideways trend indicates a volatility contraction, followed by a decisive move in either direction. The 50-period Exponential Moving Average (EMA) near 0.8815 remains sticky to the Swiss Franc asset, indicating indecisiveness among market participants.
The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, which indicates that investors await a fresh economic trigger.
Fresh upside would emerge if the asset breaks above the three-month high of around 0.8886, which would unlock upside towards the September 20 low at 0.8932 and the November 8 low at 0.8976.
On the contrary, a breakdown below February 15 low at 0.8783 would expose the asset to February 13 low at 0.8746, followed by the round-level support of 0.8700.
USD/CHF hourly chart
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