FxWirePro- USDCHF Daily Outlook

USDCHF lost more than 50 pips ahead of Fed monetary policy. The central bank expected to hike rates by 75 bpbs. Markets eye US Fed chairman Powell's comments on the pace of further rate hikes. Any hawkish statement from Fed will push the US dollar further higher.

The US ISM manufacturing index fell to 50.2 last month, the lowest since May 2020. Economic data to be watched are US ADP employment.

 The US 10-year yield recovered nearly 5.5% after hitting a low of 3.91%. The US 10 and 2-year spread widened to -46 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 85.5% from 92.5% a week ago.

Technically in the 4-hour chart, the pair is holding above short-term (21  and 55 EMA) and long-term 200 EMA (0.98803). Any break below 0.9960 confirms further bearishness, a dip to 0.9900/0.9840 is possible. It hits an intraday low of 0.99745 and is currently trading around 0.99758.

 The near-term resistance is around 1.000 and any breach above targets 1.00350/1.00750. Significant trend continuation only if it breaks 1.0150.  

Indicators (4-hour chart)

CCI (50)- Bullish

ADX- Neutral

It is good to stay away from markets till further direction.