USDCHF @ 0.95306 – Trading Levels analysis: slides to one-week low, eyes 0.9500 mark amid modest USD weakness

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USDCHF @ 0.95306 – Trading Levels analysis: slides to one-week low, eyes 0.9500 mark amid modest USD weakness

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• USD/CHF edges lower for the second successive day and drops to a one-week low on Tuesday.
• A sharp fall in inflation expectations weighs on the greenback and exerts downward pressure.
• Hawkish Fed expectations to lend support to the USD and limit losses amid a positive risk tone.

The pair currently trades last at 0.95306.

The previous day high was 0.9635 while the previous day low was 0.9522. The daily 38.2% Fib levels comes at 0.9565, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.9592, expected to provide resistance.

The USD/CHF pair adds to the previous day’s heavy losses and remains under some selling pressure for the second successive day on Tuesday. The downward trajectory drags spot prices to a one-week low, around the 0.9515 region during the first half of the European session and was sponsored by modest US dollar weakness.

The New York Fed’s monthly Survey showed that the inflation outlook fell sharply in July and prompted some selling around the USD ahead of the US CPI report on Wednesday. This turns out to be a key factor exerting downward pressure on the USD/CHF pair, though the fundamental backdrops warrant some caution for aggressive bearish traders.

Friday’s blockbuster US monthly jobs report fueled speculations that the Fed would stick to its policy tightening path and hike interest rates by 75 bps at the September policy meeting. Adding to this, Fed Governor Michelle Bowman said that the US central bank should consider more 75 bps hikes at coming meetings to bring inflation back down.

Apart from this, a goodish pickup in the US Treasury bond yields should lend some support to the buck. Furthermore, a generally positive tone around the equity markets could undermine the safe-haven Swiss franc, which, along with nervousness heading into the crucial US CPI report, might contribute to limiting losses for the USD/CHF pair.

There isn’t any major market-moving economic data due for release from the US on Tuesday, leaving the USD at the mercy of the USD price dynamics. Nevertheless, it would still be prudent to wait for a convincing break below the 0.9500 psychological mark before positioning for any further depreciating move for the USD/CHF pair.

Technical Levels: Supports and Resistances

USDCHF currently trading at 0.9524 at the time of writing. Pair opened at 0.9554 and is trading with a change of -0.31 % .

The pair is trading below its 20 Daily moving average @ 0.9651, below its 50 Daily moving average @ 0.968 , below its 100 Daily moving average @ 0.9628 and above its 200 Daily moving average @ 0.9426

The previous day high was 0.9635 while the previous day low was 0.9522. The daily 38.2% Fib levels comes at 0.9565, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.9592, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.9506, 0.9457, 0.9392
• Pivot resistance is noted at 0.9619, 0.9684, 0.9732

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