USD/CHF rejected from above 0.9750, tumbles after FOMC minutes

The Swiss franc rose across the board after the release of the FOMC minutes that contained no major surprises but triggered more losses for the greenback. USD/CHF dropped more than 50 pips and extended daily losses while EUR/CHF fell to 1.1359, the lowest since last Friday. 

The pair, that earlier today reached a 1-week high at 0.9765, tumbled to 0.9646, a 3-day low. At the moment, it trades at 0.9655/60 as it appears to be moving toward the 20-day moving average that stands at 0.9625/30. The mentioned average offered support last week from where the USD built its bounce to the upside that lasted until today. 

The minutes pushed the pair further to the downside, despite the fact that market odds for a December rate hike rose modestly. According to the minutes, at the last FOMC meeting, “several” Fed officials mentioned that inflation risks could be to the downside, however, “most” of them saw inflation rising over the next couple of years. Most supported a move regarding the balance sheet “soon”.  

CME Group FedWatch's December hike probability edged higher after FOMC minutes

USD/CHF levels to watch 

The pair is moving to the downside in the short-term after being unable to consolidate a break on top of 0.9750. That area continues to limit the upside. The greenback needs a significant close above to clear the way to more gains. 

While to the downside, the key support could be seen between 0.9610 (horizontal level) and 0.9630 (20-day moving average): if the price drops below that range, a slide to test the next support at 0.9550/55 seems probable.