USD/CHF loses momentum and retreats towards 0.8845 after US data

  • USD/CHF drops to 0.8845 after gains in the previous two sessions.
  • The US Consumer Confidence Index improved and job openings showed encouraging figures.
  • Market anticipations for a Fed rate cut in September remain high, challenging the USD.

In Tuesday’s trading session, the USD/CHF pair fell by 0.20%, dropping to around 0.8845. This drop came despite improved US consumer sentiment and solid job openings data, leading to a generally strong performance of the Dollar on Tuesday. Markets are now on high alert awaiting the outcome of the Federal Reserve (Fed) meeting scheduled for Wednesday.

The Conference Board’s Consumer Confidence Index rose in July to 100.30, from a downwardly revised 97.8 in June, showing a marginal improvement in US consumer sentiment. The US Bureau of Labor Statistics (BLS) also reported in its Job Openings and Labor Turnover Survey (JOLTS) that there were 8.184 million job openings on the last business day of June, slightly down from the revised 8.23 ​​million in May but still beating the market expectation of 8.03 million.

Looking ahead, while a Fed rate pause on Wednesday is widely anticipated due to robust U.S. economic performance, investors expect the bank to leave the door open for a cut in September. In line with that, markets are pricing in an 80% chance of a rate cut, but labor market data due out this week will guide those expectations.

USD/CHF Technical Analysis

The technical outlook for the USD/CHF has turned from neutral to bearish after being rejected by the 200-day simple moving average (SMA) during Tuesday’s session. The pair continues to trade below the 20-day, 100-day, and 200-day SMAs, suggesting continued selling pressure. Additionally, the RSI and MACD remain in the red, pointing to continued selling pressure.

Support levels remain at 0.8800, 0.8750 and 0.8730, while resistance levels are at 0.8850, 0.8870 and 0.89000.

USD/CHF daily chart

Source: Fx Street

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