USD/CHF Price Analysis: Consolidates Below 0.9000 As Focus Shifts To US Inflation

The USD/CHF pair trades sideways slightly below the psychological resistance of 0.9000 in Wednesday’s European session. The Swiss Franc asset struggles for a direction as investors await the United States (US) Consumer Price Index (CPI) data for June, which will be published on Thursday.

The US CPI report is expected to show that the core CPI, which excludes volatile food and energy prices, rose steadily by 0.2% and 3.4% on monthly and an annual basis. Monthly headline inflation is expected to have grown by 0.1% after remaining unchanged previously. While the annual figure is estimated to have decelerated to 3.1% from May’s reading of 3.3%.

A scenario in which price pressures remain sticky or hot would ease expectations for rate cuts in September. On the contrary, soft numbers will boost them.

Meanwhile, the near-term appeal of the Swiss Franc remains uncertain as cooling inflationary pressures have boosted expectations of more rate cuts by the Swiss National Bank (SNB). Swiss annual CPI rose at a slower pace of 1.3% in June from estimates and the prior release of 1.4%.

USD/CHF trades in a Falling Channel chart pattern on a daily timeframe in which each pullback is considered as selling opportunity by market participants. The Swiss Franc asset finds cushion near 200-day Exponential Moving Average (EMA) around 0.8950, suggesting that a bullish long-trend is intact.

The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting indecisiveness among investors.

Going forward, a decisive upside above June 3 high at 0.9036will drive the asset towards May 28 low at 0.9086, followed by May 30 high at 0.9140.

On the flip side, the asset would expose to downside if it breaks below June 4 low of 0.8900. This would drag the asset towards March 21 low at 0.8840 and the round-level support of 0.8800.


USD/CHF daily chart

(Click on image to enlarge)

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