It appears that the USDCHF currency pair is likely to experience a surge in value, as it has been limited to around 0.8780 due to the increased strength of the US Dollar.

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• USD/CHF looks set for a rally after remaining restricted around 0.8780 amid strength in the US Dollar.

The pair currently trades last at 0.88072.

The previous day high was 0.8781 while the previous day low was 0.8735. The daily 38.2% Fib levels comes at 0.8753, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8763, expected to provide support.

The USD/CHF pair gathers strength for a rally above the immediate resistance of 0.8780 in the European session. The Swiss Franc asset is expected to test the round-level resistance of 0.8800 amid strength in the US Dollar Index (DXY) inspired by the modest recovery in inflation and higher-than-expected Producer Price Index (PPI) data for July.

S&P500 futures add some gains in London on hopes that the Federal Reserve (Fed) will pause the policy tightening spell in September. Fed policymakers are expected to pause its year-long rate-tightening spell as inflation is expanding at a nominal monthly pace of 0.2%. The 0.2% monthly pace in inflation is in alignment with the Fed’s desired rate of 2%.

The Fed is highly expected to deliver an unchanged interest rate decision in September. However, interest rates will remain elevated for a longer period so that the return of inflation to 2% could be ensured. This would keep fears of recession steady.

After a modest inflation increase, investors await the United States Retail Sales data for July on Tuesday, which will be published at 12:30 GMT. Per estimates, consumer spending momentum remained at a higher pace of 0.4%, higher than June’s reading of 0.2%.

On the Swiss Franc front, investors start getting concerned about the interest rate decision from the Swiss National Bank (SNB), which will be announced in September. A survey from Bloomberg showed that the SNB will raise interest rates by 25 basis points (bps) in September to 2%. Regarding the inflation guidance, the survey indicates that the Consumer Price Index (CPI) will be at 1.5% in 2024.

Technical Levels: Supports and Resistances

USDCHF currently trading at 0.8797 at the time of writing. Pair opened at 0.8765 and is trading with a change of 0.37 % .

The pair is trading above its 20 Daily moving average @ 0.8697, below its 50 Daily moving average @ 0.8842 , below its 100 Daily moving average @ 0.8921 and below its 200 Daily moving average @ 0.9124

The previous day high was 0.8781 while the previous day low was 0.8735. The daily 38.2% Fib levels comes at 0.8753, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8763, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.874, 0.8715, 0.8695
• Pivot resistance is noted at 0.8786, 0.8806, 0.8831

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