. Swiss Franc Strengthens, USD/CHF Falls to 0.9000 Pre-CPI Report

Swiss Franc Strengthens, USD/CHF Falls to 0.9000 Pre-CPI Report

Swiss Franc Strengthens, USD/CHF Falls to 0.9000 Pre-CPI Report

03 Jun 2024

USD/CHF drops to 0.9000 as Swiss Franc gains strength before Swiss inflation data release

FUNDAMENTAL OVERVIEW:

  • USD/CHF falls to around 0.9000 despite the US Dollar’s recovery.
  • The US Dollar rebounds amidst uncertainty before a week filled with US data releases.
  • The Swiss Franc shows significant strength ahead of the May Swiss CPI report.

The USD/CHF pair continues its losing streak for the third consecutive trading session on Monday. Despite the US Dollar’s rebound amid uncertainty before a data-heavy week in the United States, the Swiss Franc asset weakens.

This week, the US economic calendar features several key events, including the ISM Manufacturing and Services PMI, the ADP Employment Change, the Nonfarm Payrolls (NFP) data for May, and the JOLTS Job Openings for April. These economic reports will offer crucial insights into when the Federal Reserve (Fed) might begin reducing its key borrowing rates this year.

Currently, financial markets anticipate that the Federal Reserve will begin lowering interest rates no earlier than its September meeting.

Meanwhile, the Swiss Franc shows strength ahead of the Swiss Consumer Price Index (CPI) data for May, scheduled for release on Tuesday. This CPI report will provide the Swiss National Bank (SNB) policymakers with the most recent inflation data, helping determine if a subsequent rate cut is necessary. The monthly CPI is expected to have increased at a faster rate of 0.4%, up from the previous reading of 0.3%.

USD/CHF TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

USD/CHF is trading within an up channel.

USD/CHF is moving below all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.

Immediate Resistance level: 0.9042

Immediate support level: 0.8977

HOW TO TRADE USD/CHF

After a sharp rise, USD/CHF faced rejection and declined, entering a consolidation range. Today, the price dropped significantly and is heading towards a support zone. If this zone is broken, further downside movement is possible.

TRADE SUGGESTION- STOP SELL– 0.8961, TAKE PROFIT AT- 0.8878, SL AT- 0.9024.