Uncle Sam is gearing up to print the advance GDP report for Q3!
Can the dollar keep unwinding its gains after this release?
Before moving on, ICYMI, yesterday’s watchlist looked at a range setup on USD/CAD ahead of the BOC decision. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
BOC hiked interest rates by 0.50% vs. projected 0.75% increase
BOC downgraded 2023 growth forecast from 1.8% to 0.9%
U.S. new home sales slowed from 677K to 603K in September
Australian import prices up by 3.0% in Q3 vs. projected 0.8% uptick
RBNZ Governor Orr: Inflation is still absolutely too high
German GfK consumer climate index improved from -42.8 to -41.9 in Oct
Spanish jobless rate ticked higher from 12.5% to 12.7% in Q3 vs. 12.4% forecast
U.K. media reports that new PM Sunak is considering tax hikes
ECB monetary policy statement at 12:15 pm GMT
U.S. advance Q3 GDP at 12:30 pm GMT
U.S. advance GDP price index at 12:30 pm GMT
U.S. headline and core durable goods orders at 12:30 pm GMT
ECB press conference at 12:45 pm GMT
Australian quarterly producer price index at 12:30 am GMT
BOJ monetary policy statement (Oct. 28, Asian session)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/CHF
USD/CHF 1-hour Forex Chart
The Greenback has been unwinding most of its recent gains, as traders are likely bracing themselves ahead of the top-tier U.S. reports this week.
For today, we’ve got the advance GDP release, which is expected to show a rebound of 2.3% for Q3. This follows the previous quarter’s 0.6% contraction and might be enough to calm recession fears.
Stronger than expected results might bring bullish vibes back for USD/CHF. But if bulls are unable to sustain the rally, the Fib retracement levels might attract selling pressure.
In particular, the 50% to 61.8% Fib levels might be enough to keep gains in check since these line up with a former support zone.
As you can see from the chart above, the 100 SMA crossed below the 200 SMA to suggest that the path of least resistance is to the downside. In other words, resistance levels are more likely to hold than to break.
Stochastic is still pulling higher for now, reflecting a return in buying momentum, and the oscillator has room to climb before reaching the overbought zone.
Turning lower would confirm that sellers are back in action and could take this pair back to the swing low near the .9850 minor psychological mark.
Better practice proper risk management and check out the average USD/CHF volatility when trading the news!