USDCHF slips as Fed may not be as hawkish as we think.
“Fed’s aggressive rate hike began to show its impact on US economy.”
US dollar slipped, recording more than 1% loss against its peers’ as recent data shows signs of US economy slowing down. On Wednesday, sales of new homes dropped for the month of September while August’s reading was revised lower. The data shows effectiveness of Federal Reserve’s aggressive policy tightening which began to show its effect on the economy. As such, investors begin to scale down their expectation towards relentless rate hike from Fed in the future while moving towards other major markets.
Quick recap on USDCHF
While long-term perspective signals an extension towards the upside, recent price action refutes such hypothesis.
USDCHF Weekly Technical Analysis
From weekly perspective, the pair failed to overcome 1.0050, one of the strong resistance levels thus far.
USDCHF Daily Technical Analysis
The pair is currently testing near 0.9845, a key support level that will provide us with further confirmation upon a successful closure.
ORDER: SELL STOP
STOP LOSS: 0.9900
Target 1: 0.9750
Target 2: 0.9710
ZFX Analyst’s Comment
The pair is expected to undergo short-term retracement while a successful closure will provide confirmation on this hypothesis.
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