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Broad based USD selling after an all out dovish FOMC pushed the USD/CHF below its 200-DMA level of 0.9788 levels ahead of the Swiss National Bank (SNB) rate review.
The pair closed below 200-DMA yesterday and made another attempt to rise above the same, before fresh USD selling in Europe pushed the pair down to 0.9754 levels.
SNB expected to stay pat
SNB is widely expected to keep the interest rate unchanged at -0.75%. Since, the ECB has ruled out need for further rate cuts, as of now there is little pressure on the SNB to ease. The bank has repeatedly stated the overvalued status of the CHF, but market believes the SNB would prefer tackling the same with timely FX market interventions.
SNB’s take on economy and ECB’s actions would be watched out by the markets, but may not influence CHF significantly, unless it points to more easing in the near future.
USD/CHF Technical Levels
The immediate hurdle is seen at 0.9788 (200-DMA), above which the pair could target 5-DMA level of 0.9835. A violation there would open doors for 0.9913 (previous day’s high) – 0.9960 (50-DMA). On the lower side, support is seen at 0.9700 handle, which if breached shall expose 0.9661 (Feb 11 low) and 0.9591 (Sep 17 low).
