USD/CHF looks to come up for air as SNB surprises by pausing early

<p>In what was billed to be a one and done case for the SNB, they decided to stop hiking rates earlier than anticipated. I mean perhaps it makes sense when you consider their status when viewing the inflation rankings among major economies:</p><p>*Japan data to be released on 22 September</p><p>And essentially, as the Fed and ECB also already having communicated their respective pauses, the SNB has some guideline to work with already in managing market expectations from hereon.</p><p>But either way, it is weighing on the Swiss franc as we see USD/CHF rise to its highest levels since June:</p><p>We are seeing USD/CHF now rise up to 0.9060 levels and breaking above the 0.9000 mark. It was trading around 0.8990 prior to the SNB policy decision.</p><p>The break higher not only takes out the figure level but buyers are looking to keep above the 200-day moving average (blue line) of 0.9033 as well. That will shift the bias in the pair to being more bullish and tees up a test of the late May and early June highs at 0.9100 and just above that.</p><p>In turn, this should also continue to keep the dollar underpinned as it only serves to make the Fed's pause that much better-looking; in the sense that the gap between US rates and other major countries is still quite evident and favouring the dollar.</p>

This article was written by Justin Low at www.forexlive.com.