To renew the intraday high and halt the two-day slump, USDCHF takes up bids. Before the important data/events, risk aversion and slow markets support the USDCHF recovery. The leading indicators to keep an eye on for obvious directions are the US CPI, the results of the midterm elections, and Jordan’s remarks for SNB.
The USDCHF shows modest advances at 0.9915 and breaks a two-day slump at its lowest point in a week. In doing so, the Swiss Franc (CHF) pair captures the market’s risk-off attitude and cautious attitude before Governor Thomas Jordan’s address at the Swiss National Bank (SNB).
The market’s nervousness about the upcoming US midterm elections may have contributed to the recent mood flip, along with a rise in China’s daily coronavirus count, which is the most since May 1.
According to Reuters, “COVID-19 cases dramatically accelerated in Guangzhou and other major Chinese cities on Tuesday, with the global manufacturing center battling its greatest flare-up ever and straining its capacity to avoid a Shanghai-style citywide lockdown.” The health administration in China said that the number of newly discovered locally transmitted illnesses countrywide increased to 7,475 on November 7 from 5,496 the day before, which was the largest number since May 1.
Nonetheless, the market’s attention was drawn to an unremarkable US midterm election as ex-President Donald Trump promised a “very significant” surprise on November 15. “Republicans want to use the federal debt limit as leverage to demand significant expenditure cutbacks if they take control of the House. Additionally, according to Reuters, they would want to maintain corporate tax cuts that Democrats have unsuccessfully attempted to undo over the previous two years and Trump’s 2017 individual tax cuts.
In this environment, the US stock futures show modest losses, but US Treasury rates continue to rise, and the US Dollar Index (DXY) bounces back from its eight-day low.
In the future, discussing the SNB’s preparedness for more rate hikes and the recent higher Swiss inflation statistics might test USDCHF purchasers. However, the risk-off environment may support the pair’s stability ahead of Thursday’s October publication of the US Consumer Price Index (CPI).
Technical Analysis
Until the quotation shows a daily close below the 0.9880-70 support confluence, which includes the 50-day EMA and an upward-sloping support line from September 30, USDCHF buyers are still optimistic.
