Current trend

The USD/CHF pair is showing an insignificant corrective decline, retreating from the local highs of August 2, updated the day before. The instrument is testing 0.8710 for a breakdown, while analysts expect new movement drivers to emerge.

The reason for the confident growth of the American currency the day before was macroeconomic data, which weakened the likelihood of the US Federal Reserve cutting the interest rate by 50 basis points in September. Initial Jobless Claims for the week ended August 9 fell from 234.0 thousand to 227.0 thousand, while analysts expected 235.0 thousand, and Continuing Jobless Claims for the week ended August 2 fell from 1.871 million to 1.864 million, while analysts expected 1.880 million. At the same time, Retail Sales volumes in July increased by 1.0% after –0.2% the month before, while analysts expected 0.3%.

The attention of Swiss investors was focused on the July statistics on producer prices and imports: in annual terms, Producer and Import Prices slowed its rate of decline from –1.9% to –1.7%, and in monthly terms, the indicator remained at zero dynamics, contrary to the forecast of 0.2%. Today at 08:30 (GMT 2), Industrial Production data hit the market: in the second quarter, its volume increased to 7.3% from –2.0% (revised from –3.1%), while experts expected –2.9%.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic, having retreated from the level of "80" at the beginning of the week, is again trying to reverse into an upward plane, indicating the risks of the US dollar being overbought in the ultra-short term.

Resistance levels: 0.8730, 0.8776, 0.8800, 0.8839.

Support levels: 0.8700, 0.8673, 0.8630, 0.8600.

Trading tips

Short positions may be opened after a breakdown of 0.8673 with the target at 0.8600. Stop-loss — 0.8710. Implementation time: 2-3 days.

The breakout of 0.8730 may be a signal to open new long positions with the target of 0.8800. Stop-loss — 0.8690.