USD/CHF goes back to key support in the weakest American CPI data

• USD/CHF Try the round level support at 0.8400 after US CPI data for April more than expected.
• The American dollar index (DXY) goes back to 101.30, pressed by inflation in cooling and fading of commercial optimism.
• The Swiss Franco remains firm in front of the main peers, supported by a cautious tone in the market.

The USD/CHF pair goes back to the critical round level support of 0.8400 during the American session on Tuesday. The US dollar (USD) faced sales pressure after the publication of the United States Consumer Price Index (IPC) (USA) for April, which revealed that inflation grew at a moderate pace, being below market expectations. According to the US Labor Statistics Office (BLS), the general CPI rose 2.3% year -on -year in April, lowering 2.4% in March and failing in the 2.4% prognosis. The underlying IPC, which excludes volatile food and energy components, remained stable at 2.8%, aligning with analysts’ estimates.

The American dollar index (DXY), which measures the performance of the USD compared to six main currencies, corrected about 101.30 from the monthly maximum of 102.00 seen Monday. The operators have reduced the moderate bets of the Fed for the July meeting, with the Fedwatch tool of the CME showing a 61.4%probability that interest rates are stable in the current range of 4.25%-4.50%. Despite this, the broader concerns about a cooling of the US economy and commercial uncertainties between the US and China have kept the dollar under pressure.

The Swiss Franco (CHF), meanwhile, lies upwards in front of most of the main peers, except the antipodals, since the currency benefits from its safe refuge status amid the global economic uncertainties. The pair remains damping near the horizontal support of the minimum of September 6, 0.8375, an old significant level of resistance.

Technical analysis

USD/CHF remains close to critical support at 0.8400, struggling to recover the bullish impulse. The torque has risen above the 20 -day exponential (EMA) mobile average, which currently trades around 0.8326, pointing out a possible stronger bullish trend if it is maintained. The 14 -day relative force (RSI) index has bounced to the 60.00 level, suggesting a positive impulse under construction, although a confirmed rupture would be needed above this level for a sustained rally.

Key resistance levels include the psychological level of 0.8500, followed by the maximum of April 10, 0.8580 and the maximum of April 8, 0.8611. At the bottom, a decisive breakdown below 0.8375 could expose the minimum of May 7, 0.8186, followed by the deepest support near the minimum of April 11, 0.8100 and the minimum of April 21, 0.8040.

With cautious operators before more US economic data and Fed orientations, the USD/CHF remains in a fragile recovery, closely following changes in the feeling of risk and global macroeconomic indicators.

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