USDCHF is expected to witness more downside below 0.9830 as the risk profile soars. (Pivot Orderbook analysis)

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• USDCHF is expected to witness more downside below 0.9830 as the risk profile soars.
• Less room for bigger rate hikes by the Fed is weighing on US Treasury yields.
• The SNB is not bound to keep the inflation rate in a 0-2% range but will keep focusing on bringing price stability.

The pair currently trades last at 0.9848.

The previous day high was 0.9988 while the previous day low was 0.9875. The daily 38.2% Fib levels comes at 0.9918, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.9945, expected to provide resistance.

The USDCHF pair has sensed selling pressure after failing to overstep the critical hurdle of 0.9875 in the early Asian session. The asset is hovering around its fresh two-week low at 1.3869 and is expected to surrender the same amid a risk-on market mood.

A meaningful recovery in S&P500 in the late New York session cleared that the risk-perceived currencies are on the buying list of the market participants. Meanwhile, the US dollar index (DXY) printed a fresh seven-week low at 109.36 amid a decline in safe-haven’s appeal.

The alpha generated by the US government bonds has slipped sharply as investors see no continuation of the bigger rate hike announcement by the Federal Reserve (Fed). The 10-year US Treasury yields have dropped to 2.13% as the room for bigger rate hikes is extremely low now.

The deviation between current interest rates and the proposed terminal rate is mere 80 basis points (bps) now. Therefore, Fed chair Jerome Powell is expected to adopt a gradual approach to hiking policy rates. In case of the absence of exhaustion in October’s inflation report, Fed policymakers could come forward with higher targets for interest rates and the central bank would continue hiking rates further.

As per the preliminary estimates, the headline inflation is seen lower at 8.0% vs. the prior release of 8.2%. While the core Consumer Price Index (CPI) is expected to drop marginally to 6.5% against the prior print of 6.5%.

On the Swiss franc front, Swiss National Bank (SNB) Chairman Thomas J. Jordan has clarified that the monetary policy decisions are not purely based on the inflation rate at High-Level Conference on Global Risk, Uncertainty, and Volatility, in Zurich.

The central bank is not committed to fine-tuning the inflation range at 0-2% but will take necessary action when will face the risk of soaring inflation. He further added that “We are also experimenting with machine-learning models that are trained using a large set of economic and alternative indicators.”

Technical Levels: Supports and Resistances

EURUSD currently trading at 0.9848 at the time of writing. Pair opened at 0.9888 and is trading with a change of -0.4 % .

The pair is trading below its 20 Daily moving average @ 0.9983, below its 50 Daily moving average @ 0.9855 , above its 100 Daily moving average @ 0.9738 and above its 200 Daily moving average @ 0.9614

The previous day high was 0.9988 while the previous day low was 0.9875. The daily 38.2% Fib levels comes at 0.9918, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.9945, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.9846, 0.9805, 0.9734
• Pivot resistance is noted at 0.9959, 1.0029, 1.0071

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