USDCHF Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.43% | -36.7 Pips |  |
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| Week to-date | 1.9% | 160 Pips |  |
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| October | 1.33% | 112.3 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD Producer Price Index (12-mth)
What happened lately
In the United States, the Consumer Price Index (CPI) recorded a month-to-month increase of 0.2% for September, maintaining the same moderate pace of increase observed in August and July. According to the U.S. Bureau of Labor Statistics, over a 12-month period ending in September, the all items index climbed by 2.4%. This marks the lowest annual increase in CPI since February 2021, suggesting that inflationary pressures may be stabilizing. The report highlights a consistent yet modest inflationary trend, which could provide the Federal Reserve with additional time to deliberate any further monetary policy decisions without rushed interventions.
The importance of this data is further underscored by its potential impact on the USDCHF currency pair. Following the release of the CPI data, the Swiss Franc gained strength against the U.S. Dollar, as evidenced by the 0.43% drop in USDCHF, bringing the pair to 0.85650. This development indicates that investors might view the U.S. inflation data as a signal of a potentially cautious stance by the Federal Reserve regarding interest rate hikes. A relatively stable inflation trajectory could prompt investors to favor currencies like the Swiss Franc, perceived as safe havens, especially if the interest rate differential does not widen in favor of the U.S. Dollar.
Furthermore, with the Producer Price Index (PPI) slated for release on Friday, market participants will be closely watching for any indications of inflationary pressures at the producer level, which could offer complementary insights into the current inflation narrative. The data’s potential high impact on the market suggests that investors are preparing for any surprise adjustments. Should the PPI reflect similar stability or a decline, this could reinforce the sentiment that the Federal Reserve might refrain from aggressive monetary tightening, which may apply additional pressure on the USDCHF.
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What can we expect from USDCHF today?
USDCHF on Thursday dropped -0.43% to 0.85650. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for USDCHF looks bearish as the pair posted lower in Thursday trading session.
Looking ahead for the day, immediate support level is at S1 0.85408 with break below could see further selling pressure towards S2 at 0.85166. To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 0.86144 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 0.85534 would indicate selling pressure.
For the week to-date, take note that USDCHF is bullish as the pair continued to trade higher and is up by 1.9% over the past few days.
Key levels to watch out:
| R3 | 0.86628 |
| R2 | 0.86386 |
| R1 | 0.86018 |
| Daily Pivot | 0.85776 |
| S1 | 0.85408 |
| S2 | 0.85166 |
| S3 | 0.84798 |
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