The USD/CHF has drifted lower for the past couple of days but watch out for a USDJPY-style breakout. The price is currently testing key support at around 0.9885ish, which was previously resistance. Given the bullish price structure in the last few days/weeks, we think a bullish breakout above parity looks highly likely.
Attention turns to US data after even more hawkish commentary from the Fed overnight with Mester saying the central bank still had a lot of work to do to bring inflation down and that a more restrictive policy was needed.
Up next, US PPI inflation will be in focus, which is expected to have eased in September, albeit very slightly, to an annual rate of 8.4% from 8.6% y/y in August.
Then, at 19:00 BST, minutes from the September FOMC will be released. The Fed hiked rates by 75 basis points at the meeting. The minutes are expected to reiterate the Fed’s hawkish stance, but unlikely to move markets too much as several officials have since spoken (hawkishly).
The big data release is going to be on Thursday when CPI is published. Consumer inflation has fallen very slightly in the last couple of months and another print lower would be a welcome sign. However, for the dollar to weaken we will need to see a big drop below expectations.
But if the upcoming US data helps to push yields even higher this week, then surely that could see USD/CHF go further higher and reach for a new high above May's high at 1.0065.
By Fawad Razaqzada.
Attention turns to US data after even more hawkish commentary from the Fed overnight with Mester saying the central bank still had a lot of work to do to bring inflation down and that a more restrictive policy was needed.
Up next, US PPI inflation will be in focus, which is expected to have eased in September, albeit very slightly, to an annual rate of 8.4% from 8.6% y/y in August.
Then, at 19:00 BST, minutes from the September FOMC will be released. The Fed hiked rates by 75 basis points at the meeting. The minutes are expected to reiterate the Fed’s hawkish stance, but unlikely to move markets too much as several officials have since spoken (hawkishly).
The big data release is going to be on Thursday when CPI is published. Consumer inflation has fallen very slightly in the last couple of months and another print lower would be a welcome sign. However, for the dollar to weaken we will need to see a big drop below expectations.
But if the upcoming US data helps to push yields even higher this week, then surely that could see USD/CHF go further higher and reach for a new high above May's high at 1.0065.
By Fawad Razaqzada.