USDCHF on Friday dropped -0.73% to 0.86584. Week ending 2024-08-16 rose 0.09%. What happened.

USDCHF Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.73%	-63.6 Pips
Week 2024-08-16	0.09%	8 Pips
August	-1.4%	-123 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Thu 01:30 PM Initial Unemployment Insurance Claims
Fri 03:00 PM Jackson Hole Symposium
Fri 03:00 PM Federal Reserve Chair Jerome Powell speech (Jackson Hole Symposium)

What happened over the week

In the United States, the University of Michigan reported that the August flash estimate for the Michigan Index of Consumer Sentiment increased to 67.8 points, showing an improvement from July’s 66.4 points. However, the housing sector indicated a downturn with U.S. housing starts for July falling to 1.238 million from June’s 1.353 million, as per the Census Bureau. Additionally, building permits in July decreased to 1.396 million from the revised June figure of 1.454 million. On the positive side, U.S. Monthly Retail Trade reported a rise to 1% in July, contrasting with 0% in June according to Census Bureau data. Initial Unemployment Insurance Claims for the week ending August 10 fell to 227,000, down from the previous 234,000 reported by the Department of Labor. The Bureau of Labor Statistics highlighted changes in inflation, reporting a monthly CPI inflation rate increase to 0.2% in July from -0.1% in June, while the annual rate dropped slightly to 2.9% from 3%. The Producer Price Index excluding Food & Energy for July fell to 0% from the revised June’s 0.3%. The overall Producer Price Index for July displayed a monthly drop to 0.1% and an annual decrease to 2.2% from June’s figures.

Switzerland’s economic data showed a significant recovery in industrial production, with the Federal Statistical Office reporting a year-over-year rise of 7.3% in Q2, contrasting sharply with the previous quarter’s revised decline of -2.0%.

The combined economic data and market reactions led to the USDCHF exchange rate dropping by 0.73% to 0.86584 on Friday. For the week ending August 16, the pair rose slightly by 0.09%. Several factors influenced these movements. Positive data from the University of Michigan’s Index of Consumer Sentiment, declining initial unemployment claims, and improved retail trade figures typically support the USD. However, disappointing housing starts and permits, along with relatively softer inflation and producer price indices, might have prompted a more cautious stance towards the USD. In contrast, Switzerland’s robust industrial production data likely strengthened the CHF, contributing to the USDCHF’s downward movement on Friday. Overall, mixed signals from U.S. economic indicators and stronger Swiss industrial performance impacted market sentiment, leading to fluctuations in the USDCHF exchange rate.

From X (Twitter)

Production in Switzerland's secondary sector rose by 6.4% in 2nd quarter 2024 #statistics https://t.co/kJH0UEAx7J pic.twitter.com/T6AzfCZefv

— Swiss Statistics (@swissstatistics) August 16, 2024

What can we expect from USDCHF for the new week and what happened on Friday?

USDCHF on Friday dropped -0.73% to 0.87. Price is below 9-Day EMA while Stochastic is falling. For the week ending 2024-08-16, the pair rose 0.09% or 8 pips higher.

Looking ahead, USDCHF looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 0.87 or at least consolidates above Weekly Pivot level of 0.87. On the downside, we are looking at week low 0.86 or 0.86 (WS1) as immediate support level. USDCHF need to break on either side to indicate a short-term bias. A break above 0.87 would suggest bullish bias after recent positive movement.

For the month of August, USDCHF is down by -1.4% or -123 pips lower.

Weekly key levels to watch out:

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New Residential Construction Source: Census Bureau
Manufacturing and Trade Inventories and Sales Source: Census Bureau
Advance Monthly Sales for Retail and Food Services Source: Census Bureau
Advance Monthly Sales for Retail and Food Services Source: Census Bureau
Business Formation Statistics Source: Census Bureau
Producer and Import Price Index remained stable in July Source: Federal Statistical Office