USDCHF showed a minor pullback after the SNB rate hike. The central bank increased rates by 50 bpbs to 1% in line with the estimate. Swiss inflation surged to 3% in Nov, much below the Eurozone CPI of 10%. Markets anticipate a slow pace of further rate hikes by SNB. It hits an intraday low of 0.9250 and is currently trading around 0.92775.
According to the CME Fed watch tool, the probability of a 25 bpbs rate hike in Feb 2023 rose to 73% from 43.90% a week ago.
The US 10-year yield trades weak and declined from a top of 3.63% made after the Fed's hawkish rate hike. The US 10 and 2-year spread widened to -77 basis points from -63.5% bpbs.
Technically in the 4-hour chart, the pair is holding below short-term (21 and 55 EMA) and above long-term 200 EMA (0.95090). Any break below 0.9370 confirms further bearishness, a dip to 0.9300/0.9230 is possible.
The near-term resistance is around 0.9320 and any breach above targets is 0.9370/0.9400. Significant bullish continuation only if it breaks 0.9600.
Indicators (4-hour chart)
CCI (50)- Bearish
ADX- Neutral
It is good to sell on rallies around 0.9318-20 with SL around 0.9380 for the TP of 0.9200.
