Briefly-
- USD/CHF has created a round bottom on its 4-hr chart.
- The focus will remain on the Fed and SNB decisions
- The two will likely maintain a hawkish stance this month.
USD/CHF sees a round bottom formation as market players concentrate on financial policy by the Swiss National Bank and Federal Reserve. While publishing this post, the pair trades at 0.9627, slightly beyond the previous month’s 0.9550 low.
Fed and SNB Decisions
The current USD/CHF price action reflects the Swiss National Bank and the Federal Reserve moves. These banks will meet in June to deliver their ruling on the economy. Meanwhile, Financial experts believe Fed will extend its tightening approach. Officials have confirmed a 0.50% rate hike in June and maintain similar trends for the upcoming (three) meetings.
Furthermore, the Federal Reserve confirmed it would start trimming its balance sheet this week. The current quantitative tightening rate/pace will average around $47 billion each month. Meanwhile, it will double to approximately $97 billion come September.
Also, USD/CHF reacts to the awaited Swiss National Bank’s financial decision. The bank will likely leave interest rates unchanged and in the negative territory. Keep in mind that SNB’s rates have been negative for years.
Nevertheless, reports suggest SNB will adopt a hawkish stance as Switzerland sees grown inflation. According to the latest data, headline consumer inflation increased by 2.5%, the highest in 14 years. Moreover, Thomas Jordan stated that weakening economic activity worldwide due to escalating inflation will see them adopting an unpleasant monetary policy.
USD/CHF Prediction
The 4hr chart indicates USD/CHF on massive bullish bias over the past couple of days. The pair climbed to its current level of 0.9625, climbing from 0.9542. For now, it trades near the 50% FIB retracement zone. Moreover, the Moving Average Convergence Divergence moved towards the neutral zone. Also, the pair tries to move beyond the 50 moving average.
USD/CHF’s round bottom pattern shows the pair will likely maintain upsurges, bulls targeting the crucial resistance near 0.9800. a decline under the 0.9570 support will cancel the bullish bias.
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