Current Trends
The USD/CHF pair is trading at 0.8829, showing a corrective trend amidst negative movement in the US dollar.
The Swiss franc has strengthened following the release of macroeconomic indicators. While the country's key industries had been sluggish, signs of recovery are now evident. This week, attention is focused on the July leading indicators index from the KOF Swiss Economic Institute. This index considers 12 indicators related to consumer confidence, production, new orders, and the real estate market, reflecting the outlook for the next six months. The index is expected to remain at 102.6 points, the highest level since February 2022, highlighting economic recovery. Later this week, inflation data is scheduled for release, which could prompt the Swiss National Bank to decide on a rate cut from 1.25% to 1.00%. This would mark the second consecutive adjustment, possibly occurring if the Consumer Price Index falls below 1.3%.
The US dollar is correcting around 104.00 points on the USDX. The market reacted neutrally to the Personal Consumption Expenditures (PCE) index. The core index, which excludes food and energy, remained unchanged year-over-year at 2.6% in June, with a month-over-month increase of 0.2%. Investors were disappointed that personal income in June increased by only 0.2%, down from 0.4% in the previous month, and that the spending index was revised down from 0.4% to 0.3%. This indicates that American consumers are holding back on spending in anticipation of future price increases.
Support and Resistance
On the daily chart, the trading instrument is approaching the support line of the downward channel in the range of 0.8920–0.8670.
Technical indicators maintain a sell signal. The fast EMA of the Alligator indicator is diverging from the signal line, and the AO histogram is forming corrective bars in the sell zone.
- Resistance Levels: 0.8880, 0.9040
- Support Levels: 0.8800, 0.8660
Trading Plan
- Short Positions: It is recommended to open short positions if the price stabilizes below 0.8800, targeting 0.8660. Set a stop loss at 0.8900. Duration: More than 7 days.
- Long Positions: It is recommended to open long positions if the price stabilizes above 0.8880, targeting 0.9040. Set a stop loss near 0.8800.
