The Fed may keep rates high for a long time
Technical Analysis Summary USD/CHF: Buy
| Indicator | Value | Signal |
| RSI | Buy | |
| MACD | Buy | |
| MA(200) | Neutral | |
| Fractals | Neutral | |
| Parabolic SAR | Buy | |
| Bollinger Bands | Neutral |
Chart Analysis
On the daily timeframe, USDCHF: D1 has exited a long-term downtrend. Several technical analysis indicators have generated signals for further upward movement. We do not exclude a bullish movement if USDCHF: D1 rises above the last fractal high and the upper Bollinger Band line: 0.906. This level can be used as an entry point. The initial risk limit can be set below the Parabolic signal, the lower Bollinger Band line, the last fractal low, and the January 2021 minimum: 0.88. After opening a pending order, we move the stop loss along with the Bollinger Band and Parabolic signals to the next fractal low. This way, we improve the potential profit/loss ratio in our favor. The most cautious traders can switch to the four-hour chart after entering the trade and set a stop loss, adjusting it in the direction of movement. If the price surpasses the stop level (0.88) without activating the order (0.906), it is recommended to cancel the order as there are internal changes happening in the market that were not taken into account.
Fundamental Analysis of -
Some Fed officials do not rule out further rate hikes. Will USDCHF quotes continue to grow?
Fed regional directors James Bullard and Neel Kashkari expressed the opinion that the rate should be increased if high inflation persists. According to the CME FedWatch Tool, the probability of the Fed rate hike to 5.5% from the current level of 5.25% at the meeting on July 26 rose to 37.2%. A week earlier, it was only 15.8%. At the next Fed meeting on June 14, the rate is likely to remain at the current level of 5.25%. The probability of this exceeds 70% in the last few weeks. High rates help strengthen the US dollar. Recall that in April the US inflation was 4.9% y/y. Data for May will be released on June 13th. On May 26, the Switzerland Employment Level for Q1 2023 will be published. It has been growing almost continuously for over 15 years. A new peak in employment is expected. If this does not happen, the Swiss franc may come under pressure.