Home Forex USD/CHF eases towards 0.8900 on risk-off momentum as traders eye US CPI data

USD/CHF eases towards 0.8900 on risk-off momentum as traders eye US CPI data

by SuperiorInvest


  • The USD/CHF pair starts the week with minimal losses as risk aversion continues to be in the driver’s seat.
  • U.S. wholesale inventories were unchanged in March, rising 9.1% year over year despite falling in the first quarter.
  • Traders are eyeing a survey of Fed chief credit officials along with U.S. inflation data.

USD/CHF pair started the week with minimal losses of 0.15%, although the latest round of inflation data in Switzerland suggested that the Swiss National Bank (SNB) might take a less hawkish approach. Last United States (U.S. data) sparked a solid labor market, although traders are eyeing inflation data during the week. At the time of writing, USD/CHF is trading at 0.8891, which is 0.15% below its opening price.

US stocks trend lower, reflecting sour sentiment as safety-seeking investors move into CHF

USD/CHF is set to continue to decline during the day US dollar index (DXY), a measure of the dollar’s value against a basket of six currencies, fell 0.02% to 101.190. U.S. stocks are lower as investors watch the latest Senior Loan Officer Survey (SLOOS) release Fed amid the ongoing banking turmoil in the US.

Although U.S. bank stocks have partially recovered, Wall Street remains under stress as sentiment has taken a hit as debate over the U.S. debt limit shows no signs of improvement. US Treasury Secretary Janet Yellen noted that there are no “good options” to resolve the debt ceiling in Washington without the help of the US Congress.

On the data front, the US economic agenda revealed that wholesale inventories were unchanged in March, below estimates of 0.1% month-on-month, the US Commerce Department revealed. On a year-over-year basis, inventories jumped 9.1% in March, despite a decline in the first quarter, as more robust spending by US consumers contributed to the fall in inventories.

USD/CHF Technical Analysis

From daily diagram From a USD/CHF perspective, it is still biased to the downside, although it is trading above year-to-date (YTD) lows of 0.8820. However, as the price action continues its downtrend, the Relative Strength Index (RSI) is making higher lows, indicating that a positive divergence is emerging. Therefore, this could open the door for further upside, but the RSI needs to break above the 50-midline. Downside risks in USD/CHF lie at 0.8820, followed by 0.8800. Conversely, if USD/CHF recovers 0.8900, further gains are assured, although a downward trendline resistance appears at 0.8970 before climbing above 0.9000.

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