The dollar index has fallen 0.15% over the past 24 hours amid growing uncertainty about the Federal Reserve's (Fed) monetary policy.
The Bank of Canada and the Reserve Bank of Australia raised their key rates this week. The Bank of Canada raised its rate to 4.75% for the first time in 22 years.
Tapas Strickland, head of market economics at NAB, said the moves by the Bank of Canada and the RBA underscore the unfinished cycle of rate hikes by global regulators.
Market participants are waiting for an interest rate decision from the Federal Reserve and the European Central Bank. It’s going to be announced next week.
Investors understand that the Fed has to make at least one more hike. The question is whether the rate will change next week or in July.
According to the CME FedWatch tool, there is a 36% chance that Fed hikes rates by a quarter point next week, the day before there was a 22% chance.
The U.S. economy remains resilient thanks to strong consumer demand, but growth in some areas is slowing, U.S. Treasury Secretary Janet Yellen said on Wednesday. She expects further progress in lowering inflation over the next two years.
The May U.S. consumer inflation report, which is expected to be released before the Fed meeting, will give investors a clearer picture of the state of the world's largest economy.
Expectations for next week's events may correct the USDCHF currency pair prices in a narrow range.
The USDCHF currency pair price broke through the uptrend support on the H4 timeframe, but did not consolidate beyond it. The price returned to the ascending channel, forming a corrective range.
The RSI indicator (standard values) shows a divergence, which gives a signal for a reversal.
The hourly timeframe shows the price is moving into an indefinite correction.
Fundamental and technical characteristics are more indicative of a decline in the price of the currency pair.
Signal:
The short-term outlook for the USDCHF pair is to sell.
The target is at the level of 0.9035.
Part of the profit should be fixed near the level of 0.9065.
A stop-loss should be placed at the level of 0.9130.
The bearish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
