USDCHF climbs above 0.9500, as bears eye rallies to re-engage after cracking the 200-DMA

The USDCHF extended its weekly rally, to four consecutive days, after registering a new seven-month-old low around 0.9356 on Monday. However, hawkish commentary by US Federal Reserve (Fed) speakers shifted sentiment sour for the benefit of the US Dollar (USD). Hence, the USDCHF is trading at 0.9518, above its opening price by 0.86%.

Fundamentally speaking, nothing has changed. The Federal Reserve would continue on its upward trajectory, hiking rates, after the St. Louis Fed President James Bullard said that rates are not “sufficiently restrictive,” as he foresees the Federal Funds rate (FFR) to peak at around the 5% to 7% range. On Wednesday, the San Francisco Fed President Mary Daly said that pausing hikes “was off the table.”

Data-wise, the housing market continued to weaken, even though speculations that a Fed pause might occur increased due to US equities pairing some of its year losses. Housing Starts plunged 4.2% in October, on a monthly pace, below September’s 1.3% contraction. Building Permits followed suit, dropping 2.4%, below 1.4$ September’s increase.

Of late, US Initial Jobless Claims for the last week decelerated to 222K, beneath estimates of 225K. At the same time, Continuing claims advanced 13K to 1.51 million, flashing signs that the labor market is easing.

Aside from this, the Switzerland National Bank (SNB) Governor, Andrea Maechler, is crossing newswires. She said that inflation in Switzerland is no longer “shock driven” and added that the SNB would continue to lift rates if inflation projections remained above the central bank’s target.

USDCHF Price Analysis: Technical outlook

All that said, the USDCHF recovered from last week’s losses and is up in the week 1.13%. Nevertheless, the USDCHF is bearish-biased once it cleared the 200-day Exponential Moving Average (EMA) at 0.9623. Still, it could be subject to a correction, as the Relative Strength Index (RSI) pulled out from oversold conditions, exacerbating a rally above 0.9500.

That said, the USDCHF’s first resistance would be 0.9600, ahead of the 200-day EMA at 0.9623. On the flip side, USDCHF key supports are the 0.9500 psychological figure, followed by the September 13 daily low at 0.9479, ahead of the August 11 swing low at 0.9370.