On Wednesday, USD/CHF shows multidirectional movements, not moving far from the 0.8450 level. After two days of growth and a rebound from the local lows of mid-September, the pair. demonstrates an uncertain correction.
The dollar's rise at the beginning of the week was supported by a speech by Jerome Powell at a meeting of the National Association for Business Economics (NABE). The head of the Fed noted that the regulator prefers a cautious reduction in interest rates by 25 basis points, fearing a possible return of inflation, despite stable economic indicators.
The latest data from the United States turned out to be mixed. The index of business activity in the manufacturing sector (ISM) in September remained at 47.2 points, which is below expectations (47.5), while the number of open vacancies according to JOLTS increased to 8,040 million, exceeding analysts' forecasts.
Later this week, an important report on the US labor market for September is expected, which may affect investor sentiment and their expectations regarding the Fed's next steps. Economists expect that the number of new jobs outside agriculture will decrease to 140 thousand, and the unemployment rate will remain at 4.2%. The average wage growth is projected at 3.8% in annual terms.
The Swiss franc is supported by positive macroeconomic data. The business activity index from the Association of Supply Managers (SVME) rose to 49.9 points in September, and retail trade expanded by 3.2% in August, exceeding forecasts. Swiss inflation data is expected tomorrow, which is projected to remain at 1.1% year-on-year.
The head of the Swiss National Bank, Martin Schlegel, said that inflation is likely to continue to decline within the target range of 0.0–2.0%. 85% of analysts expect the Central Bank to cut the rate to 0.75% at the next meeting in December.
The Bollinger Band indicator on the daily chart is slightly decreasing while the MACD and Stochastic signal a possible purchase.
If the pair breaks down the 0.8450 level, then we will form short positions with a target of 0.8400. We will set the stop loss to 0.8481.
in case of a rebound, breakdown and consolidation of the price above 0.8481, we proceed to purchases with a target of 0.8541. In this case, we will place the protective stop at 0.8450.