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18 Sep 2013
USD/CHF muted ahead of FOMC minutes
FXstreet.com (Athens)- The USD/CHF is moving sideways, ahead of the looming of the big day of the FOMC minutes.
Will the FOMC minutes give momentum on the USD/CHF?
The USD/CHF is indeed stalled at 0.9260 area, very little changed since the Asian opening trading session. We consider that despite the fact that the USD/CHF is confined in a very tight range, the vast majority of traders have priced in the cross the outcome of the FOMC minutes. As a matter of fact is seems that traders all over the globe, are more than sure that the outcome will be a dovish one, i.e. a relatively modest tapering with the additional forward guidance. Despite that, investors should not forget that Bernanke told lawmakers July 17 that “low inflation could cause the recovery to bog down by inhibiting capital investment and increasing the risk of “outright deflation,” a broad-based decline in prices.” Also today apart from FOMC minutes, we are ahead of US data that would maybe have an impact on the pair.
Technical Outlook on USD/CHF
Traders should in any case bear in mind that the correlation between the USD/CHF and the EUR/USD, is heavily negatively correlated, thus, while EUR/USD is trading to the upper level today is very logical that the USD/CHF is under pressure. Gareth Berry, Analyst on behalf of UBS mentions that “Real money buying was evenly matched by leveraged selling, leaving net flows delicately balanced.”
Will the FOMC minutes give momentum on the USD/CHF?
The USD/CHF is indeed stalled at 0.9260 area, very little changed since the Asian opening trading session. We consider that despite the fact that the USD/CHF is confined in a very tight range, the vast majority of traders have priced in the cross the outcome of the FOMC minutes. As a matter of fact is seems that traders all over the globe, are more than sure that the outcome will be a dovish one, i.e. a relatively modest tapering with the additional forward guidance. Despite that, investors should not forget that Bernanke told lawmakers July 17 that “low inflation could cause the recovery to bog down by inhibiting capital investment and increasing the risk of “outright deflation,” a broad-based decline in prices.” Also today apart from FOMC minutes, we are ahead of US data that would maybe have an impact on the pair.
Technical Outlook on USD/CHF
Traders should in any case bear in mind that the correlation between the USD/CHF and the EUR/USD, is heavily negatively correlated, thus, while EUR/USD is trading to the upper level today is very logical that the USD/CHF is under pressure. Gareth Berry, Analyst on behalf of UBS mentions that “Real money buying was evenly matched by leveraged selling, leaving net flows delicately balanced.”