Trading idea for USD/CHF on March 20, 2024
During Wednesday's Asian session, USD/CHF updates the local highs of mid-November last year and tests the resistance of 0.8900 for strength.
The volatility of currency pairs remains low, as traders are in no hurry to open new positions before the publication of the results of the two-day meeting of the Federal Reserve System (Fed), which will be held at 18:00 GMT. Analysts do not foresee changes in the main parameters of the monetary policy of the American regulator, but hope for updated forecasts for economic growth and inflation. Many experts believe that in light of the growing inflation risks, the Fed may postpone monetary policy easing for the second half of the year. According to the Fedwatch Tool, the probability of the first rate cut in June is now estimated at 55%. During the year, analysts expect three rate cuts of a total of 75 basis points. If Fed Chairman Jerome Powell confirms the regulator's cautious approach at today's meeting and expresses the need for more macroeconomic data, the US currency may receive a powerful boost to growth, which will negatively affect the Swiss franc exchange rate. Additional support for the dollar was provided by data on the US real estate market. Thus, the volume of construction of houses started in February increased from 1.374 million to 1.521 million units, which turned out to be significantly higher than expectations of 1.425 million.
The meeting of the Swiss National Bank on monetary policy will be held tomorrow. The Swiss regulator also has no plans to change monetary policy, so the interest rate is likely to be maintained at 1.75%. Inflation in Switzerland fell to 1.2% in February, which is the lowest since October 2021. Given that inflation in the United States is significantly higher, American monetary policy will remain "hawkish" longer than in Switzerland. Against this background, the growth of the USD/CHF pair may continue. We issue an order
Buy-Stop 0.8920 Take-Profit 0.9100 Stop-Loss 0.8860