USDCHF showed a minor pullback to 0.94683 after a massive sell-off. The Swiss franc was one of the best performers in two weeks on board-based US dollar weakness. North Korea fired a ballistic missile and warned the US of a "fiercer military response". The escalation of geo-political tension between Russia and Ukraine increased demand for safe-haven assets like the Swiss franc.
US retail sales rose 1.3% in Oct, above the estimate of 1%. Markets eye US Philly fed manufacturing index and Fed member Bullard speech for further direction.
According to the CME Fed watch tool, the probability of a 50 bpbs rate hike in Dec increased to 85.4% from 56.8% a week ago.
The US 10-year yield lost more than 13% after hitting a high of 4.244%. The US 10 and 2-year spread widened to -65 basis points from -57 bpbs.
Technically in the hourly chart, the pair is holding above short-term (21 EMA), below 55 EMA, and long-term 200 EMA (0.96110). Any break below 0.9375 confirms further bearishness; a dip to 0.9300/0.9195 is possible.
The near-term resistance is around 0.9480, any breach above targets is 0.9550/0.9600/0.9660. Significant trend reversal only if it breaks 1.0150.
Indicators (4 Hour chart)
CCI (50) - Bearish
ADX- Bearish
It is good to sell on rallies around 0.9480-825 with SL around 0.9550 for the TP of 0.9370.
