Foreign exchange market update: Another day, another $

USD/CHF increases

The expected interest rate rise in the USA is boosting the US dollar across the board and in recent weeks the US dollar has also risen against the franc. The USD/CHF 0.9600 rate is currently in the focus of market participants. A strong labour market report from the US could ultimately be responsible for a manifestation of interest rate expectations in the US and the dollar once again gaining against the franc.

The seasonally adjusted US unemployment rate was 3.6% in March 2022; 2.4% lower than last year. The labour market is trending towards full employment and could boost the already high inflation figures even further. In search of labour, companies are willing to pay higher salaries, which in turn contributes to a continuous sustained rise in inflation. In March, the inflation rate in the US amounted to 8.5%.

Crucial: the 0.9600 mark

From a chart perspective, we have been in an upward trend since January 2021. The strong rise of the US dollar in recent weeks has now brought the marks of 0.9600 and 0.9800 back as possible targets of this upward movement. If these two important resistances are overcome in the long term, the focus will shift back to levels around 1.0200. In addition to the omnipresent topic of interest rates, a ceasefire and a strengthening euro could potentially slow down this trend or lead to a trend reversal.

Support 0,9350
Support 0,9200

Resistance 0,9600
Resistance 0,9800

The chart below shows the current upward trend of the USD/CHF currency pair:

Source: TradingView

If the USD/CHF rate does not rise above the 0.9600 respectively 0.9800 level, it could move back towards the current trendline. We can look forward to the next labour market report on 6 May 2022.

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Disclaimer:
Please note that this elaboration was completed on 25/04/2022 11:08 CET.
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