#USDCHF @ 0.92918 consolidates as Swiss Franc stabilizes post-UBS and Credit Suisse merger. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• USD/CHF consolidates as Swiss Franc stabilizes post-UBS and Credit Suisse merger.
• Anticipation builds for Federal Reserve: 25 bps hike or pause.
• Adversity is likely to remain amid the unfolding banking crisis.

The pair currently trades last at 0.92918.

The previous day high was 0.9301 while the previous day low was 0.924. The daily 38.2% Fib levels comes at 0.9263, expected to provide support. Similarly, the daily 61.8% fib level is at 0.9278, expected to provide support.

USD/CHF has entered a consolidation phase this week, with the Swiss Franc finding some stability following the merger of UBS and Credit Suisse. After Credit Suisse defaulted amid a liquidity crunch, Swiss authorities intervened and facilitated the UBS takeover of the troubled bank.

Attention has now shifted to the upcoming Federal Reserve (Fed) policy decision on Wednesday. Investors are divided on whether the Fed will deliver a 25 basis point (bps) rate hike at the forthcoming FOMC meeting or not.

It is noteworthy that the Fed has recently opened its swap line to provide US Dollar liquidity to all central banks in need. Additionally, the Fed has been conducting instant lending operations through its discount window, resulting in a spike in the Fed’s balance sheet despite ongoing Quantitative Tightening (QT).

These actions appear contradictory, raising rates while injecting liquidity. However, such a scenario is not unprecedented, as the Bank of England (BoE) has demonstrated in the past. Thus, one cannot dismiss the possibility of similar Fed action.

Although the odds favor a 25 bps rate hike from the Fed, it will be crucial to monitor the central bank’s assessment of the underlying banking conditions for the US economy, given the recent failures of commercial banks.

Market pricing has fluctuated dramatically over the past 10 days, with investors initially anticipating a larger half-point rate increase before banking stresses emerged, then at one point expecting rates to remain unchanged. Among economists, those predicting a quarter-point rise do not discount the possibility of a pause.

Following the Fed’s decision, markets will await the Swiss National Bank’s (SNB) policy announcement. In light of the Credit Suisse turmoil, the likelihood of a 50 bps rate hike has diminished.

Technical Levels: Supports and Resistances

USDCHF currently trading at 0.9293 at the time of writing. Pair opened at 0.926 and is trading with a change of 0.36 % .

The pair is trading below its 20 Daily moving average @ 0.9319, above its 50 Daily moving average @ 0.9259 , below its 100 Daily moving average @ 0.9367 and below its 200 Daily moving average @ 0.9547

The previous day high was 0.9301 while the previous day low was 0.924. The daily 38.2% Fib levels comes at 0.9263, expected to provide support. Similarly, the daily 61.8% fib level is at 0.9278, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.9233, 0.9206, 0.9173
• Pivot resistance is noted at 0.9294, 0.9328, 0.9354

[/s2If]
Join Our Telegram Group