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USD/CHF trims losses after strong US retail sales

  • USD/CHF fell towards 0.8850 and then stabilized at 0.8885, recording slight losses.
  • The PPI showed new signs of cooling inflation, but positive retail sales alerted the markets.
  • Investors remain confident that the Fed will not raise rates in December.

USD/CHF saw measured downward moves on Wednesday while trading near 0.8885, with the pair’s trajectory marked by weak US PPI and strong October US Retail Sales.

Regarding the data, the US Producer Price Index (PPI) registered a year-on-year increase of 1.3% in October, below forecasts, and did not reach the expected 1.9%. The core PPI for October also fell short of expectations, recording a year-on-year figure of 2.4% instead of the expected 2.7% and falling from the previous reading of 2.7% in September. On a positive note, October retail sales performed better than expected, showing a month-on-month decline of 0.1%, better than the expected decline of 0.3%.

In reaction, the US dollar recovered, paring some of Tuesday’s losses driven by a rise in US Treasury yields, with the 2-year rate rising to 4.91%, while the 5- and 10-year rates they increased to 4.52% and 4.53%, respectively. In line with this, these types could be anticipating that Retail Sales issued a warning that the Federal Reserve (Fed) could take those figures as a threat to the advance of inflation, which could justify further tightening. It should be noted that on Tuesday, the markets were happy that the Consumer Price Index (CPI) and the core cooled and are now betting on a quick rate cut by the Fed. For the December meeting, it is now discounted a pause.

USD/CHF levels to watch

On the daily chart, USD/CHF presents a bearish technical picture, with indicators reflecting that sellers are taking control. The Relative Strength Index (RSI) printed a bearish slope below its midpoint, while the Moving Average Convergence Histogram (MACD) plots ascending red bars.

In a broader context, sellers pushed the pair below the 20,100 and 200-day SMAs, suggesting that the bears are now in control.

Supports: 0.8870, 0.8850,0.8830.
Resistances: 0.8900 (100-day SMA), 0.8950, 0.9000 (convergence of 20-day and 200-day SMA).

USD/CHF Daily Chart


Latest price today 0.8883
Today I change daily -0.0001
Today’s daily variation -0.01
Today’s daily opening 0.8884
daily SMA20 0.8993
daily SMA50 0.9024
SMA100 daily 0.8902
SMA200 daily 0.8997
Previous daily high 0.9028
Previous daily low 0.888
Previous weekly high 0.9046
Previous weekly low 0.8954
Previous Monthly High 0.9244
Previous monthly low 0.8888
Daily Fibonacci 38.2 0.8937
Fibonacci 61.8% daily 0.8972
Daily Pivot Point S1 0.8833
Daily Pivot Point S2 0.8782
Daily Pivot Point S3 0.8685
Daily Pivot Point R1 0.8982
Daily Pivot Point R2 0.9079
Daily Pivot Point R3 0.913

Source: Fx Street

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