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Ichimoku Watch: USD/CHF Punches Higher Following Rate Cut

Ichimoku Watch: USD/CHF Punches Higher Following Rate Cut, FP Markets

SNB Cuts Policy Rate; USD/CHF Retests Conversion Line

Earlier this morning, the Swiss National Bank (SNB) cut its overnight policy rate by 25 basis points to 1.25%, as most economists expected. The central bank also left FX guidance pretty much unchanged.

At the time of writing, the USD/CHF currency pair is up +0.7% in a market that has been in the process of forming an early downtrend since topping at 0.9224 in early May.

According to the Ichimoku Indicator, this trend to the downside could continue:

  • Price action has been trading above the Lagging Span at 0.8904 since late April (green).
  • The Conversion Line (blue) at 0.8911 crossed below the Base Line (red) at 0.8994 in mid-May to help confirm a downside bias.
  • The Leading Span A (light green) at 0.8951 crossed below the Leading Span B (pink) at 0.9027 to form a Kumo Cloud resistance and reaffirm the downtrend.

Price Direction?

While sellers appear to be in control in the medium term, today’s short-term rally has lifted the currency pair to the lower side of the Conversion Line. That said, in view of the current downtrend, sellers will likely target a sell-on-rally scenario at the resistance zone between the Base Line and the Conversion Line.

Ichimoku Watch: USD/CHF Punches Higher Following Rate Cut, FP MarketsDISCLAIMER:

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  • Ichimoku Watch: USD/CHF Punches Higher Following Rate Cut, FP Markets
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