USD/CHF sticks to small gains above 0.99 ahead of US inflation data
|- USD/CHF trades in a 45-pip range since the start of the week.
- US CPI data and the FOMC meeting to drive the price action.
The USD/CHF pair continues to have a difficult time setting a near-term direction as investors are eagerly waiting for the FOMC to publish the last monetary policy meeting statement of the year. As of writing, the pair is trading at 0.9922, adding 0.07% on the day.
Ahead of the FOMC announcements, the U.S. Bureau of Labor Statistics is going to release the CPI data for November. Markets expect the consumer inflation to rise by 0.4% and 2.2% on a monthly and yearly basis respectively. Although the Fed's favorite gauge of inflation is the core PCE price index, an upbeat CPI data could help the greenback gather strength ahead of the FOMC meeting. Yesterday, the US Dollar Index gained traction following the robust PPI data and we could see a similar reaction from the markets. At the moment, the DXY is unchanged on the day at 94.06.
Later in the session, the FOMC is expected to hike the policy rate by 25 basis points. However, this decision is already priced in, and the updated economic projections and the 'dot plot' could become the primary driver.
- FOMC Preview: 11 major banks expectation from December meeting
Technical levels to consider
The first technical support for the pair could be seen at 0.9890 (Dec. 12 low/50-DMA) ahead of 0.9835 (Dec. 5 low) and 0.9775 (100-DMA). On the upside, resistances align at 0.9930 (Monday's high), 1.0000 (psychological level) and 1.0040 (Oct. 27 high).
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