USD/CHF slides to 2-week lows below parity amid broad USD weakness
- US Dollar Index extends slide ahead of FOMC meeting.
- Investors are possibly pricing a downgrade to the number of rate hike expectations in 2019.
- Wall Street looks to open the day modestly higher.
The USD/CHF pair continued to push lower on Tuesday and touched its lowest since March 5 at 0.9994. As of writing, the pair was trading at 0.9998, dropping 0.15% on the day and posting daily losses for the sixth time in the last seven trading days.
The unabated selling pressure surrounding the dollar ahead of tomorrow's critical FOMC announcements continue to weigh on the pair. The US Dollar Index, which tracks the greenback's value against a basket of six major currencies, slumped to a fresh 18-day low of 96.29 earlier in the session and was last seen losing 0.2% at 96.33. The lack of significant macroeconomic data releases suggests that the currency's market valuation is being impacted by the FOMC expectations.
Previewing the event, "We believe the distribution around the median projected policy rate (‘dot plot’) in the Summary of Economic Projections (SEP) will be important. A tighter distribution around the median would be a dovish signal to the markets," Standard Chartered analysts said in a recently published report.
Meanwhile, the S&P 500 Futures is up 0.4% on the day, signalling toward a positive opening in major equity indexes in the U.S., which could hurt the demand for safe havens and help the pair limit its losses.
Technical levels to consider
With a daily close below 1.0000/1.0005 (parity/50-DMA), the pair could extend its slide toward 0.9960 (Mar. 1 low) and 0.9925 (Feb. 28 low). On the upside, resistances are located at 1.0030 (20-DMA), 1.0085 (Mar. 13 high) and 1.0125 (Mar. 7 high).