- USD/CHF calm down on Tuesday amid a lack of catalysts.
- US Dollar Index struggles to make a decisive recovery above 95.
- Coming up: JOLTS Job openings and NAHB Housing Market Index.
After closing the previous day with modest losses, the USD/CHF pair struggles to find direction on Tuesday as it trades in a tight 30-pip range below the 0.99 handle. As of writing, the pair was virtually unchanged on the day at 0.9880.
Since failing to hold above 96, the US Dollar Index, which tracks the greenback against a basket of six major currencies, continues to stay under a modest selling pressure as investors are looking for the next catalysts that could wake up the USD bulls. Before the FOMC releases the minutes of its September meeting tomorrow, however, the greenback could continue to have a difficult time gaining traction. At the moment, the DXY is at its lowest level in 20-days at 94.90.
Previewing tomorrow’s FOMC event, “the September FOMC meeting held few surprises as the Committee raised the federal funds target range 25bp to 2.00-2.25%, the third hike of 2018. However, the minutes will likely provide important context for some of the decisions the Committee made in September, including the choice of dropping the “accommodative” language in the post-meeting statement,” said Nomura analysts.
On the other hand, Wall Street’s performance on Tuesday could provide a fresh catalyst to the pair. If we see a decisive recovery in major equity indexes, the pair could try to rise above the 0.99 mark as the safe-haven CHF could start losing interest.
Technical levels to consider
The pair could face the first support at 0.9850 (Oct. 15 low) ahead of 0.9790 (200-DMA) and 0.9760 (50-DMA). On the upside, resistances are located at 0.9900/10 (psychological level/daily high), 0.9955 (Oct. 9 high) and 1.0000 (psychological level/parity).
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