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Source: Newsmaker.id
The USD/CHF pair traded relatively flat around 0.8170 on Friday (Nov 6), following a period of downward pressure. The US dollar began to find support as investors adopted a cautious stance ahead of the US Nonfarm Payrolls (NFP) release—a critical indicator for the Federal Reserve’s policy direction in December.
However, the dollar’s gains remain capped by a decline in US bond yields. The Democratic Party’s significant performance in the US midterm elections has contributed to a drop in oil prices, driven by growing hopes for a resolution to the conflict involving Iran. This development could potentially ease inflationary pressures and temper expectations for a Federal Reserve interest rate hike. Currently, the market assigns a 70.9% probability to a rate hike in December.
Meanwhile, the Swiss franc has drawn support from increased demand for safe-haven assets. Political uncertainty in the US and concerns regarding the regulation of the AI industry have prompted greater investor caution. At the same time, the Swiss National Bank is not expected to raise interest rates in the near term, as inflationary pressures remain well-contained.
From a technical perspective, analysts at UOB maintain a bearish outlook for USD/CHF over a one-to-three-week horizon. The 0.8140 level serves as a key area; although the pair briefly dipped below it, it has yet to sustain a position beneath this mark. Should the downward pressure persist, 0.8110 is the next level to watch, while 0.8205 stands as a crucial resistance level that could shift the bearish outlook.
Newsmaker Analysis: The future direction of USD/CHF will be heavily influenced by the NFP results and expectations surrounding Federal Reserve interest rate policy. Strong labor market data could bolster the dollar, whereas a weak outcome might weigh on the greenback and strengthen the Swiss franc. As long as USD/CHF fails to break above 0.8205, downward pressure remains the primary scenario to monitor. (srh)
Source: Newsmaker.id