USD/CHF clings to small gains near 0.9930 ahead of Fed announcements
- Upbeat sentiment helps the pair stay in the positive territory on Wednesday.
- US Dollar Index stays in range below 97 ahead of Fed meeting.
After finding interim support near the 0.99 handle, the USD/CHF pair rebounded modestly on Wednesday and now stays calm in the positive territory ahead of today's critical FOMC meeting. As of writing, the pair was up 0.1% on a daily basis at 0.9935.
Although the greenback is struggling to find demand as investors are opting out to stay on the sidelines amid the uncertainty surrounding the Fed's policy outlook for 2019, the improved market sentiment, as reflected by the sharp rise witnessed in European equity indices, today allowed the pair to gain traction. At the moment, Germany's DAX is up 0.65% on the day and the UK's FTSE 100 is adding a little over 1%. Meanwhile, the DXY is down 0.15% at 96.85.
In a recently published report, TD Securities analysts noted that the Fed is widely expected to hike the policy rate to 2.5%. "We look for Powell to sound cautiously upbeat on the outlook although the statement is likely to include less forward-looking language, consistent with an emphasis on data dependency,” analysts added.
Later in the session, the SNB is scheduled to publish its quarterly bulleting but it's unlikely to receive a significant reaction from the markets.
Technical levels to consider
The resistances for the pair could be seen at 0.9950 (20-DMA), 1.0000 (psychological level) and 1.0065 (Nov. 5 high). On the downside, the initial support aligns at 0.9910/0.9900 (200-DMA/psychological level) ahead of 0.9875 (100-DMA) and 0.9860 (Dec. 11 low).