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03.11.2021 07:42

USD/CHF fades bounce off three-month low near 0.9150 ahead of Fed

  • USD/CHF struggles to extend the biggest run-up in seven weeks.
  • Firmer Swiss inflation data, upbeat equities joined softer Treasury yields to portray corrective bounce off multi-day low.
  • Pre-Fed trading lull probes bulls, US ADP Employment Change, ISM Services PMI can entertain traders.

USD/CHF grinds higher around 0.9150, following the notable bounce off a three-month low. That said, the quote consolidates the biggest daily jump since mid-September amid the pre-Fed anxiety and a lack of major data/events.

The risk barometer pair jumped heavily the previous day following Switzerland’s upbeat Consumer Price Index (CPI) and Retail Sales data for October and September respectively. The headline inflation figure cross 1.1% market consensus to 1.2% YoY whereas the Retail Sales jumped past upwardly revised 0.8% previous readouts to 2.5% on the yearly basis.

Other than the strong data at home, mildly optimistic market sentiment, mainly led by the firmer equities, also underpinned the USD/CHF run-up. The Wall Street benchmarks posted a positive daily closing with the fresh record highs of DJI30 and S&P 500. Behind the moves could be the upbeat earnings and hopes that the US Federal Reserve (Fed) may rethink before announcing a heavy consolidation to the easy money policies.

That being said, the S&P 500 Futures print mild losses amid the cautious mood before the Fed meeting. The same joins an absence of major catalysts to move the markets. S&P 50 Futures, on the other hand, adds 0.7 basis points (bps) around 1.55% by the press time.

Moving on, US ADP Employment Change and ISM Services PMI for October may entertain USD/CHF traders ahead of the Fed’s verdict. While the US data prints are likely to arrive as mixed, market players anticipate a $15 billion tapering from the US central bank, any mismatch can propel the quote.

Read: Fed Interest Rate Decision Preview: Inflation, employment and interest rates

Technical analysis

In addition to the 200-DMA level surrounding 0.9155, a downward sloping trend line from October 12, close to 0.9175, also challenge USD/CHF buyers.

 


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