USDCHF hits parity, AUDUSD lowest since April 2020

USD remains the dominant force on the Forex market at the beginning of the new week. The dollar index strengthened for a fourth consecutive session to above 113 on Monday, as investors continue to bet the Federal Reserve will press ahead with its aggressive tightening plans, following Friday's NFP report.  Upcoming US CPI figures, FOMC minutes, and appearances from several policymakers this week could provide further support for greenback. Money markets are currently pricing in another 75 bp rate hike in the fed funds rate for November.

USDCHF pair rose 0.70% and hit parity level, for the first time since mid-June 2022. This level also coincides with the upper limit of the triangle formation. If buyers manage to uphold current momentum, upward move may accelerate towards highs from May 2022 around 1.0065. On the other hand, if sellers manage to regain control, nearest support to watch lies around 0.9870. Source: xStation5

Stronger dollar puts severe pressure on Aussie. The AUDUSD pair fell below $0.63, a level not seen since April 2020, weighed by dovish RBA, risks of a global recession and heightened geopolitical tensions. RBA surprisingly raised interest rates by 25 bp to 2.6% last week, while analysts expected a bigger 50 bp increase and said that the cash rate had been raised significantly in a short period of time so it decided to slow the tightening process. Nevertheless the central bank left the door open for further tightening in the coming months as inflationary pressures persist.

AUDUSD is moving in a strong downtrend. Looking at the D1 interval, pair broke below the 127.2% external retrenchment of the last upward correction. According to the classic assumptions of technical analysis, a move towards the next retracement  at 0.6250, or even the lower limit of the descending channel is possible. On the other hand, if sentiment improves, the nearest resistance can be found at 0.6365. Source: xStation5