FxWirePro- USDCHF Daily Outlook

USDCHF showed a nice pullback of nearly 150 pips on poor Swiss economic data. The KOF economic indicator of Switzerland which is a composite leading indicator dropped to 90, the sixth consecutive month below 100. It has decreased the chance of further rate hikes by the Swiss central bank.

The US 10-year yield recovered nearly 4% after hitting a low of 3.91%. The US 10 and 2-year spread widened to -42 basis points from 23.9- bpbs.

 According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Nov dropped to 88.5% from 98.4% a week ago.

Technically in the 4-hour chart, the pair is holding below short-term (21  and 55 EMA) and above long-term 200 EMA (0.98803). Any break below 0.9840 confirms further bearishness, a dip to 0.9780/0.9720 is possible. It hits an intraday high of 0.99272 and is currently trading around 0.98618.

 The near-term resistance is around 0.9930 and any breach above targets 0.9960/1.0000.  

Indicators (4-hour chart)

CCI (50)- Bearish

ADX- Neutral

It is good to buy on dips around 0.9965 with SL around 0.9920 for a TP of 1.0050/1.00750.