USD/CHF declines to multi-week lows around 0.8960

• USD/CHF declined to it lowest level since September 20, to a daily low of 0.8957.
• The Swiss currency is the best performer in the session.
• The USD holds its foot after mixed Housing market figures, eyes on the Fed’s Beige book.

In Wednesday’s session, the USD/CHF declined to its lowest level in over a month, below 0.8957 and then settled around 0.8970. On the one hand, the CHF is the top performer of the session, trading with gains against the EUR, GBP, JPY and USD. On the other hand, the green currency gained some ground ahead of the anticipated Federal Reserve (Fed) Beige book report and after mixed Housing data. On the Swiss side, nothing relevant was released during the European session.

The US Dollar measured by the DXY Index edged higher, reaching around 106.40, reflecting a modest 0.20% increase for the day. On the data front, Building Permits for September surpassed expectations at 1.475M, while Housing Starts fell short of expectations at 1.358M, showing a mixed housing scenario.

The upcoming release of the Fed's Beige Book is anticipated to offer a clearer perspective on US economic activity and labour market conditions, important for investors to continue placing their bets for the next Fed’s decisions. Meanwhile, US yields are observing a slight uptick, with the 2-year, 5-year, and 10-year rates climbing to 5.20%, 4.87%, and 4.86%, respectively, showing that markets may be gearing up for one last hike by the Fed in 2023. According to the CME FedWatch tool, the probability of a 25 basis points hike during the December meeting has risen to approximately 42%, while a pause in November is near to be priced in.

USD/CHF Levels to watch 

 The daily chart analysis indicates a neutral to bearish outlook for USD/CHF, as the bears show signs of taking control but still face challenges ahead.The Relative Strength Index (RSI) points south below its middle point, while the Moving Average Convergence (MACD) histogram exhibits larger red bars. Furthermore, the pair is below the 20 and 200-day Simple Moving Averages (SMAs), but above the 100-day SMA, implying that the bears have more work to do to confirm a bearish trend.

Support levels: 0.8950, 0.8930, 0.8900 (100-day SMA). 

Resistance levels: 0.9015 (200-day SMA), 0.9040, 0.9070.

USD/CHF Daily Chart