• USD/CHF catches aggressive bets and jumps to a two-week high following the SNB policy decision.
  • A 75 bps hike was already priced in and weighed on the CHF in the absence of any hawkish surprise.
  • Bets for more aggressive Fed rate hikes continue to lift the USD and remain supportive of the move.

The USD/CHF pair spikes to a two-week high after the Swiss National Bank (SNB) announced its monetary policy decision. The pair breaks above the 100-day SMA barrier during the early European session and is currently trading around the 0.9800 region.

As was widely expected, the SNB hiked its benchmark sight deposit interest rate by 75 bps to 0.50% from -0.25% previous. This comes on the back of a surprise 50 bps increase in the June meeting, which was the first hike since September 2007. The Swiss franc, however, weakens across the board in the absence of a hawkish surprise. Apart from this, relentless US dollar buying provides a strong lift to the USD/CHF pair.

In fact, the USD Index, which measures the greenback's performance against a basket of currencies, rose to a fresh 20-year peak amid a more hawkish stance adopted by the Federal Reserve. It is worth noting that the Fed raised interest rates by another 75 bps on Wednesday and signalled more aggressive rate increases at its upcoming meetings. Apart from this, technical buying above the 100 DMA barrier remains supportive of the move.

The pair will soon reach resistance in the 0.9830s from a trendline drawn connecting the June and September 2022 highs which is also the upper boundary of a falling channel the pair has been oscillating in for most of the year. A clear break above the channel line and daily open or close above would be required to provide confirmation of a breakout and fresh impetus to the uptrend. Such a move, however, would then probably lead to an extension higher to a target, first at parity, and then 1.0080, which is the 61.8% Fibonacci extension of the move inside the channel prior to the breakout – the usual method used by analysts for forecasting such extensions. 

Investors now look forward to the post-meeting press conference, where comments by Thomas Jordan, Chairman of the Governing Board of the SNB, should provide a fresh impetus to the USD/CHF pair. Later during the early North American session, traders will take cues from the release of the US Weekly Initial Jobless Claims data.

Technical levels to watch

USD/CHF

Overview
Today last price 0.9623
Today Daily Change -0.0041
Today Daily Change % -0.42
Today daily open 0.9664
 
Trends
Daily SMA20 0.9691
Daily SMA50 0.9632
Daily SMA100 0.9687
Daily SMA200 0.9491
 
Levels
Previous Daily High 0.97
Previous Daily Low 0.962
Previous Weekly High 0.9661
Previous Weekly Low 0.948
Previous Monthly High 0.9808
Previous Monthly Low 0.9371
Daily Fibonacci 38.2% 0.967
Daily Fibonacci 61.8% 0.9651
Daily Pivot Point S1 0.9623
Daily Pivot Point S2 0.9582
Daily Pivot Point S3 0.9543
Daily Pivot Point R1 0.9703
Daily Pivot Point R2 0.9741
Daily Pivot Point R3 0.9783

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD drops below 0.9750 after upbeat US PMI data

EUR/USD drops below 0.9750 after upbeat US PMI data

Following a brief consolidation period, EUR/USD came under bearish pressure and dropped below 0.9750 during the American session on Friday. Better than expected Manufacturing and Services PMI figures from the US provided a boost to the dollar, further weighing on the pair.

EUR/USD News

GBP/USD renews multi-decade below 1.0900

GBP/USD renews multi-decade below 1.0900

After having recovered toward 1.1100 earlier in the day, GBP/USD turned south in the American session and touched its lowest level since 1985 below 1.0900. The PMI data from the US showed that the private sector activity recovered in September, fueling another leg higher in DXY.

GBP/USD News

Gold falls below $1,650, looks to post weekly losses

Gold falls below $1,650, looks to post weekly losses

Pressured by the renewed dollar strength on upbeat US PMI figures, gold lost its recovery momentum and dropped below $1,650. Meanwhile, the 10-year US T-bond yield is up nearly 1%, forcing XAU/USD to stay on the backfoot heading into the weekend.

Gold News

BTC makes a bullish comeback amid regulatory tension, but lacks confirmation

BTC makes a bullish comeback amid regulatory tension, but lacks confirmation

Bitcoin price has produced three consecutive lower lows since September 7, but at the same time, the Relative Strength Indicator (RSI) has shown a positive rise demonstrating a lack of underlying bearish power.

Read more

TSLA suffers as yields continue to dominate

TSLA suffers as yields continue to dominate

Tesla (TSLA) reacted poorly to the latest central bank developments with the stock falling 4% on Thursday. Main indices were not as badly hit with the S&P 500 losing less than 1% and the Nasdaq just over 1%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures