USDCHF Rose As Fed Deals Out Another Rate Cut

Fundamental Analysis

* Expected Cut: The USD/CHF pair has inched upward as the market continues to digest the Federal Reserve’s anticipated 25 basis point rate cut. This latest quarter-point reduction, announced on Thursday, follows a larger 50 basis point cut made in early September. Fed officials stated that the labor market has “generally eased,” while inflation edges closer to the central bank’s 2% target. Although this additional 25 basis point cut aligns with market expectations and helps stabilize trading, attention now turns to the likelihood of another cut in December. According to the CME FedWatch Tool, traders currently see a strong possibility of one more 25 basis point rate reduction in December, with a 67% chance priced in for a final cut on December 18. Investors remain split, however, as some expect the Fed might hold off after November.

Technical Analysis

* Technical Breakout: USDCHF was traded higher following prior breakout above the previous resistance level 0.87305. MACD which illustrate bullish bias signal suggest the pair to likely further extend its gains.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 0.88900. Conversely, a potential reversal is also to be expected and the price could head back towards 0.85650 after it breach back below the level 0.87305.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

As the week wrapped up with significant events that have impacted the market, attention will shift to the upcoming week’s economic data releases, which are expected to provide further insights into market trends and potential policy shifts.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and Switzerland data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.