USD/CHF Falls As SNB Leaves Cash Rate Unchanged

FXOpen

The US Dollar (USD) extended downside movement against the Swiss Franc (CHF) on Thursday, dragging the USD/CHF to less than 1.8940 following the US central bank’s decision to trim the monthly asset purchase program by $10 billion to $35 billion. The sentiment remains bullish due to Higher High and Higher low in the recent wave. The huge bearish pin bar which emerged on the daily chart recently is however keeping the pair under selling pressure.

Technical Analysis

As of this writing the pair is being traded near 1.8943. A hurdle can be seen around 1.8962, the 200 Simple Moving Average (SMA) ahead of 1.9036, the bearish pin bar as shown in the following chart. A break above the 1.9036 resistance area could spur a renewed buying interest, validating a fresh rally above the 1.9100 handle.

usdchf-d1-capital-trust-markets[1]

On the downside, the pair is likely to find a support around 1.8907, the low of the bearish pin bar and 38.2% fib level ahead of 1.8878, the confluence of 55 Simple Moving Average (SMA) & 100 SMA and then 0.8780, the 76.4% fib level.

Swiss Monetary Policy

The Swiss National Bank (SNB) kept the benchmark interest rate unchanged at 0% today amid fragile growth and deflation in the economy. The decision was widely expected by the analysts, thus the USD/CHF shunned the Switzerland monetary policy announcement and continued to fall.

CB Leading Indicator

The Consumer Board of the US is due to release the leading indicator data today. According to the average forecast of different analysts, the leading indicator increased by 0.6% in May as compared to 0.4% in the month before, better than expected actual outcome will be seen as bullish for USD/CHF and vice versa.

Conclusion

Considering the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy, the stop loss should be placed at the swing high of the bearish pin bar as described above.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Commodities and European currencies Test Key Supports EUR/USD Analysis: The Price Today Has Set Its Minimum Since the Beginning of March Market Analysis: GBP/USD Dives While USD/CAD Gains Bullish Pace The US Currency Corrects After Recent Growth USD/JPY Price Analysis: Consolidation ahead of US News

Latest articles

Weekly Market Wrap With Gary Thomson: NIKKEI-225, USD/JPY, GBP/USD, USD/CAD, Gold
Financial Market News

Weekly Market Wrap With Gary Thomson: NIKKEI-225, USD/JPY, GBP/USD, USD/CAD, Gold

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

  • NIKKEI-225 Analysis Indicates Possibility

Forex Analysis

Commodities and European currencies Test Key Supports

On the eve of the Easter holidays, the main currency pairs have slightly slowed down the development of the main trends and are consolidating near key ranges, the breakdown of which could provoke a change in the vectors of medium-term

Shares

Stock Market Analysis: NVDA Losing Leadership?

Since the start of the week, the S&P-500 Index (US500) is up about 0.58% while NVDA's share price is down about 3.8%. This is a worrying sign for Nvidia stock investors — could it be a sign

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.