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  • The SNB is prepared to take “all measures necessary” to reduce inflation.
  • To lower inflation, the SNB will employ interest rates, currency purchases, and sales.
  • Swiss inflation decreased from 3.3% in September to 3.0% in October.

Today’s USD/CHF outlook is bearish. Chairman Thomas Jordan stated on Friday that the Swiss National Bank was prepared to take “all measures necessary” to reduce inflation back to its target range of 0-2%.

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“We will take all measures necessary to bring inflation back into the territory of price stability. This is our mandate and our ambition,” Jordan told an event in Bern.

“The current monetary policy is not sufficiently restrictive to bring inflation back to the price stability range over the medium term.”

He stated that the SNB would employ interest rate increases, currency purchases, and sales to drive policy toward its objective.

After hiking rates twice this year to the present level of 0.5%, the SNB plans additional rate increases to battle inflation. At the upcoming SNB policy meeting on December 15, the market expects a 50-basis-point increase with a 35% chance of a 25-basis-point increase.

Swiss inflation decreased from 3.3% in September to 3.0% in October, but it remained high by Swiss standards. According to Jordan, it costs more to lower inflation once it has risen above a nation’s price stability target. This meant that a quick and comprehensive response was needed to stop inflation from becoming entrenched.

USD/CHF key events today

Investors are awaiting a PPI report from Switzerland. The Producer Price Index (PPI) tracks changes in the cost of manufactured goods. It is a reliable indicator of inflation in consumer prices, making up most of the overall inflation.

USD/CHF technical outlook: Bulls struggling to find momentum

USD/CHF outlook

Looking at the 4-hour chart, we see the price trading well below the 30-SMA and the RSI in the oversold region, showing bears are in charge. The price has made a steep bearish move, breaking through support levels and pausing at the 0.9400 psychological level.

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At this point, bulls returned as the price got oversold. This bullish move might retest the 0.9500 key psychological level before giving back control to the bears. If bulls are strong, they might retest the 0.9630 resistance level. The bears will look to take out the 0.9400 level when they return.

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