- The FOMC’s minutes did not bring many surprises but the greenback remains the strongest G10 currency.
- Traders bought USD/CHF in anticipation of the FOMC’s minutes and then took some profits after the release.
The Swissy found an intraday bottom at 0.9894 then rose about 85 pips ahead of the FOMC’s minutes. After the news release, the pair gave back about 25 pips and is trading close to the 0.9950 level up 0.30% on Wednesday.
In the first part of the day, the main theme was marked by the risk-off sentiment which saw increased demand for the Swiss franc. A little before the Ameican forex session the US dollar bulls shrugged-off the negative sentiment in tandem with US equities. In fact, markets are concerned by the lack of progress in the US-China trade talks as well as the possible cancellation of the meeting between the US President Trump and the North Korean leader Kim Jong Un scheduled for June in Singapore.
Later in the day, the FOMC’s minutes didn’t reveal many surprises that traders already knew. As usual, the Fed said that it would “soon be appropriate” to hike interest rates and that “risks to the economic outlook appear roughly balanced.” However, the report also read: “many saw little evidence of overheating of labor market with wage pressures still moderate,” which some investors interpreted as a rather lukewarm comment. However, on the broad picture, the Federal Reserve Bank remains the most hawkish central bank around and the greenback is still trading at multi-week high.
USD/CHF 4-hour chart
The main trend is bullish while the USD/CHF pulled back to the 0.9950 level. The market is trading above its 200-period simple moving (SMA) on the 4-hour time-frame while it is trading below its 50 and 100-period SMA. Resistances are priced in at 0.9949 swing low and at the 1.0000 level while supports are seen at the 0.9894 swing low and at the 0.9850 psychological level.