Current trend

The USD/CHF pair has been actively growing for the third week, testing the resistance level of 0.9033 and preparing to continue moving towards the targets of 0.9155 and 0.9225.

Traders are predicting the further actions of the Swiss National Bank after the departure of its head, Thomas Jordan, who held this position for twelve years, remembered for his unorthodox monetary policy, negative interest rate, the abolition of the peg of the national currency to the euro, as well as the bankruptcy of one of the country’s largest banks, Credit Suisse Group AG. On October 1, the department’s vice-chairman, Martin Schlegel, will take the post. The Swiss cabinet has already approved the assignment. Experts believe he will keep the general monetary policy vector but approach some issues more cautiously, avoiding risk.

Meanwhile, the macroeconomic statistics supported the franc. The June leading economic indicators index from the Swiss Economic Institute (KOF), combining twelve key economic indicators, rose from 102.2 points to 102.7 points with a forecast of 101.0 points, but the volume of retail sales corrected from 2.2% to 0.4%, falling short of the estimates by 2.5%. On Thursday at 07:45 (GMT 2), investors will pay attention to the unemployment data. Seasonally adjusted indicator may stay at 2.4%, and non-seasonally adjusted – at 2.3%. The inflation report due at 08:30 (GMT 2) will affect the price dynamics significantly. The June consumer price index may decrease from 0.3% to 0.1% MoM and remain at 1.4% YoY. It will be an additional argument for financial authorities to reduce interest rates at the September meeting.

The most important for American investors, the labor market report is due on Friday at 14:30 (GMT 2). Analysts expect that the June nonfarm payrolls will change from 272.0K to 195.0K, average hourly earnings – from 4.1% to 3.9% YoY and from 0.4% to 0.3% MoM, and the unemployment rate will remain at 4.0%. The statistics may clarify the next steps of the US Fed and the likelihood of a rate cut before the end of the year. The markets are counting on a 25 basis point adjustment in September, and there may be two adjustments by the end of the year.

Support and resistance

The trading instrument has been growing for the third week, testing the resistance level of 0.9033 (Murrey level [4/8], Fibonacci correction 38.2%). Consolidation above will allow it to reach the area of ​​0.9155 (Murrey level [6/8]) and 0.9225 (Fibonacci correction 50.0%). In case of a breakout of the support area of ​​0.8940–0.8911 (middle line of Bollinger Bands, Murrey level [2/8]), the price will return to the long-term downward channel and may decline to the area of ​​0.8789 (Murrey level [0/8], Fibonacci correction 23.6%) and 0.8667 (Murrey level [–2/8]).

Technical indicators do not give a single signal. Bollinger Bands are trying to reverse upwards, the MACD histogram is preparing to enter the positive zone and form a buy signal, but Stochastic may leave the overbought zone.

Resistance levels: 0.9033, 0.9155, 0.9225.

Support levels: 0.8911, 0.8789, 0.8667.

Trading tips

Long positions may be opened from 0.9050, with the targets at 0.9155, 0.9225 and stop loss 0.8990. Implementation period: 5–7 days.

Short positions may be opened below 0.8911, with the targets at 0.8789, 0.8667 and stop loss 0.9000.