The US dollar exchange rate rose slightly by the middle of the week as investors are waiting for the minutes of the latest US Federal Reserve meeting to be released.
The FOMC minutes are expected to be published today at 18:00 GMT. The Federal Open Market Committee is responsible for 4 main areas: unemployment, international trade, domestic prices and government securities trading. All decisions on these four items are made in special meetings. The last one was held on June 13–14. The publication of the minutes may reveal new details about the Federal Reserve's monetary policy.
Investors expect the US central bank to continue its tightening policy in July. Such fears are connected with regulator officials’ speech in favor of two additional rate hikes of a quarter percentage point before the end of the year.
In June, European central banks surprised the markets by delivering the biggest number of monthly interest rate hikes year-to-date.
For example, the Swiss central bank's discount rate rose to 1.75%. And the European Central Bank raised its key rate by 25 basis points to 4%. This indicates a further tightening of rates, as policymakers seek to deal with inflation.
Today at 9:00 GMT the European Producer Price Index is going to be published. It is a statistical indicator that shows changes in prices of goods and services. Confirmation of the forecast of -1.3% may correlate with the value of Swiss franc (CHF).
The currency pair USDCHF on the hour timeframe has been in a corrective rectangular channel for three weeks.
At the same time, the pair's price has formed an upward support within the channel. The price has rebounded off the trend line. This indicates the strength of the technical support. .
The RSI (standard values) shows the pair's current short-term upward convergence.
Signal:
The short-term outlook for the USDCHF pair is to buy.
The target is at the level of 0.9015.
Part of the profit should be fixed near the level of 0.9000.
A Stop-loss should be placed at the level of 0.8940.
The bullish 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.
