USD/CHF erases gains as greenback loses strength

The USD/CHF pair couldn't extend the rise above 1.0076 as the US Dollar Index lost the bullish momentum after the FOMC minutes. As of writing, the pair is at 1.0042, still 0.23% up on the day.

Although the FOMC minutes clearly indicated that the committee is planning to start shrinking the central bank’s $4.5 trillion balance sheet later this year, it's still unclear how they are going to do that or how that move would affect the rate hike path. The US Dollar Index fell back towards the familiar 100.40 region after an initial spike to 100.90.

• No light shed on the relationship between the Fed's balance sheet and the rate adjustment cycle - BBH

The CHF was also supported by the sudden change of course of the major equity indexes in the United States. After rising decisively following today's strong ADP March figures, U.S. stocks moved back into the red as the Fed officials noted that the new administration fiscal policies wouldn't have any impact on the economy until next year.

• FOMC minutes: Fed participants 'generally preferred' to change reinvestment of both treasury and mortgage-backed securities

Technical outlook

The 100-DMA at 1.0070 is the first hurdle for the pair seconded by 1.0100 (psychological level/Fib. 50% of Jan/Feb fall) and then 1.0155 (Mar. 8 high). On the downside, supports could be found at 1.0000 (psychological level), 0.9950 (200-DMA) and finally 0.9880 (Mar. 22 low).