USD/CHF consolidates losses as investors digest last week’s US data

• The USD/CHF pair is currently hovering around the 0.8840 level, experiencing slight losses.
• Investors are pulling back after the pair fell more than 1% last week.
• The November FOMC Minutes will be the highlight of the week.

During Monday’s session, the USD/CHF pair experienced some softening, trading around the 0.8840 area, reflecting slight losses. While there were no significant swings in the market, the pair traded in a limited range, with investors evaluating last week’s data from the US on a quiet Monday.

The latest report from the US Bureau of Labor Statistics revealed that the US core Consumer Price Index (CPI) disappointed expectations in October. It recorded year-on-year growth of 4%, slightly below the 4.1% forecast and a slowdown from the previous figure of 4.1%. For its part, the global figure showed year-on-year growth of 3.2%, lower than the consensus of 3.3% and below the previous reading of 3.7%.

In this sense, the publication of weak inflation figures in the US had a significant impact on the Dollar, as investors began to discount that the Federal Reserve (Fed) would not raise rates further and would cut them sooner. For the rest of the week, no relevant report will be released, and the market’s attention shifted to Tuesday’s November minutes of the Federal Open Market Committee (FOMC), looking for clues about upcoming monetary policy decisions. Additionally, investors are awaiting new guidance on the Fed’s stance on inflation and whether one month of positive data is enough for the Fed to end tightening.

USD/CHF levels to watch

Despite a flat Relative Strength Index (RSI) that is currently in negative territory, selling momentum is powerful. This valuation is derived from the observed positions of both the Moving Average Convergence (MACD) and the Simple Moving Averages (SMA).

The MACD displaying red bars strongly signals the presence of selling pressure, while the pair trading below the SMA of 20, 100, and 200 affirms the prevailing bearish control on the broader scale. Additionally, the indicators turning somewhat flat could indicate that the bears are taking a pause, which could cause a temporary slowdown in selling activity after a week of losses of 1.8%.

Support levels: 0.8820, 0.8800, 0.8780.
Resistance Levels: 0.8860, 0.8890 (100-day SMA), 0.8900.

USD/CHF Daily Chart