On Tuesday, the pair continues to trade around the local highs of November 11. Volatility of currency pairs in the market is low, as investors do not hurry to open new positions before the release of the Fed meeting minutes on Wednesday. In addition, tomorrow is full of important macroeconomic data, where the special place is given to the Eurozone and UK business activity indexes.
Investors will look for hints on the Fed's monetary policy outlook in the minutes of the U.S. regulator. The regulator is expected to somewhat reduce the rate of monetary easing in December and raise the rate by only 50 basis points. On the futures market, the probability of such a scenario is estimated at 80%. Meanwhile, U.S. inflation is far from the 2% target, so the Fed may act more harshly.
There is no important news on the market today. Attention may be paid to the index of business activity in the manufacturing sector of the U.S. from FRB Richmond, but hardly the report alone will be able to disperse the dynamics of the currency assets.
Today USD/CHF pair demonstrates a weak recovery, developing an upward momentum, which was formed last week after the "bears" failed to break the strong support at 0.9350. The upward dynamics allowed the pair to add 2.5% and return to testing resistance at 0.9600 again.
USD/CHF Technical analysis: Bollinger & MACD
Bollinger indicator is steadily declining in the daily timeframe while MACD is rising in the negative range, approaching the zero level. The stochastic oscillator has entered the area of maximum values.
We believe that the dollar will continue to strengthen, while the Swiss franc remains under pressure from the energy crisis risks.
If it gets above the key resistance level of 0.9600, we go long with Take Profit at 0.9700. Stop loss is set at 0.9550.
On a rebound from 0.9600 we wait for breakdown of support at 0.9550 and then open sales with the target at 0.9450. Stop-loss is set at 0.9600.
Read more: Using the MACD indicator in forex trading