Last week the rates started moving up, and this Wednesday rose sharply. The chart shows that we can hardly call this a price correction. It looks like a trend reversal in its early stages. The turning point was the meeting of the Federal Reserve, following which the regulator changed its rhetoric and announced a possible increase in the rate in 2023. Earlier, it was mentioned that this was a possibility only in 2024. Moreover, they mentioned that it can be revised twice. As a result, the USD began to strengthen sharply against all major currencies. The current behavior of investors can be considered premature in many ways, but they heard what they wanted and began to actively buy the USD. The rates quickly turned out to be in the overbought zone, but this does not mean that there are sales ahead of us. The US really has a good chance against the safe franc in the long run - at a time when the global economy is gradually emerging from the shadow of the pandemic.
The Swiss National Bank also held a meeting this week, but was more restrained and left its plans unchanged. In addition, the regulator noted that the franc is quite strong now and in case of a further strengthening, they will enter the foreign exchange market with interventions. Good macroeconomic reports on the Swiss economy remained in the background when everyone was focused on the news from central banks. As a result, the rates rose to their highest level in two months, and perhaps this is just the beginning of the recovery.
Most technical analysis tools indicate the effectiveness of the deals to buy, while at the same time oscillators are unanimous in their signals about the overbought dollar. Of course, downward adjustments are possible, but we believe that now is the best time for buying, at the stage of the formation of a new trend.
