USDCHF @ 0.94088 – Support/Resistance analysis: bounces off multi-month low, keeps the red below 200-DMA amid sluggish USD

Follow Our Twitter

USDCHF @ 0.94088 – Support/Resistance analysis: bounces off multi-month low, keeps the red below 200-DMA amid sluggish USD

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE and login below to read further [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• USD/CHF drops to a fresh multi-month low amid the emergence of fresh USD selling.
• Diminishing odds for a later Fed rate hike in September continue to weigh on the USD.
• The risk-on mood undermines the safe-haven CHF and helps limit any further downside.

The pair currently trades last at 0.94088.

The previous day high was 0.9545 while the previous day low was 0.9394. The daily 38.2% Fib levels comes at 0.9452, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.9487, expected to provide resistance.

The USD/CHF pair witnessed some selling for the fourth successive day and drops to a four-month low during the first half of the European session. Spot prices, however, show some resilience below the 0.9400 mark and quickly recover around 20 pips in the last hour.

The US dollar struggles to capitalize on the previous day’s bounce and remains sluggish near its lowest level since late June touched in the aftermath of softer US consumer inflation figures on Wednesday. This, in turn, exerts some downward pressure on the USD/CHF pair, though sustained weakness below the 0.9400 mark is needed to confirm a bearish breakdown below a technically significant 200-day SMA.

The weaker-than-expected US CPI report forced investors to scale back expectations for a larger 75 bps Fed rate hike move in September. That said, the overnight hawkish comments by Fed officials should act as a tailwind for the greenback. Apart from this, a generally positive tone around the equity markets seems to undermine the safe-haven swiss franc and limit losses for the USD/CHF pair, at least for now.

The Fed, meanwhile, is still expected to hike interest rates by 50 bps points at the September policy meeting. This, in turn, supports prospects for the emergence of some dip-buying around the USD and further warrants some caution for aggressive bearish traders. Market participants now look forward to the US Producer Price Index (PPI) for a fresh impetus later during the early North American session.

Technical Levels: Supports and Resistances

USDCHF currently trading at 0.941 at the time of writing. Pair opened at 0.943 and is trading with a change of -0.21 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.9619, 50 SMA 0.9675, 100 SMA @ 0.9631 and 200 SMA @ 0.9429.

The previous day high was 0.9545 while the previous day low was 0.9394. The daily 38.2% Fib levels comes at 0.9452, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.9487, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.9368, 0.9305, 0.9216
• Pivot resistance is noted at 0.9519, 0.9608, 0.9671

[/s2If]