USD/CHF falls to lows around 0.8960

• USD/CHF fell to its lowest level since September 20, hitting a daily low of 0.8957.
• The Swiss currency is the one that performs best in the session.
• The dollar remains firm after the mixed figures in the housing market, with an eye on the Fed’s Beige Book.

In Wednesday’s session, the pair USD/CHF fell to its lowest level in over a month, below 0.8957 and then settled around 0.8970. On the one hand, the CHF is the best performing currency of the session, trading with gains against the EUR, the GBP, the JPY and the USD. On the other hand, the green currency gained some ground ahead of the much-awaited Federal Reserve (Fed) Beige Book report and after the mixed housing data. On the Swiss side, nothing relevant was published during the European session.

The US dollar, as measured by the DXY index, rose and settled at around 106.40 points, which represents a modest increase of 0.20% on the day. Regarding the data, construction permits for September exceeded expectations and stood at 1,475 million, while housing construction starts did not reach 1,358 million, showing a mixed outlook in the real estate sector.

The upcoming release of the Fed’s Beige Book is expected to provide a clearer view of U.S. economic activity and labor market conditions, important for investors to continue placing their bets on the Fed’s upcoming decisions. US yields are meanwhile seeing a slight rebound, with 2-, 5- and 10-year Treasury yields rising to 5.20%, 4.87% and 4.86%, respectively, showing that markets could be gearing up for a final Fed hike in 2023. According to CME’s FedWatch tool, the probability of a 25 basis point hike during the December meeting has risen to around 42%, while a pause in November is almost in the cards.

USD/CHF Levels to watch

Daily chart analysis indicates a neutral to bearish outlook for USD/CHF as bears show signs of taking control but still face challenges ahead. Relative Strength Index (RSI) Points South Below from its midpoint, while the moving average convergence (MACD) histogram exhibits larger red bars. Furthermore, the pair is below the 20-day and 200-day SMA, but above the 100-day SMA, implying that the bears have more work to do to confirm a downtrend.

Support levels: 0.8950, 0.8930, 0.8900 (100-day SMA).

Resistance Levels: 0.9015 (200-day SMA), 0.9040, 0.9070.

USD/CHF Daily Chart