Current trend

On Friday, the USD/CHF pair fell to 0.8407 amid positive data on the Swiss economy.

Thus, in August, the business activity index from procure.ch (PMI) increased from 43.5 points to 49.0 points, significantly exceeding the forecast of 43.7 points. The consumer price indicator showed a zero value, although analysts expected a correction from –0.2% to 0.1% MoM, and fell from 1.3% to 1.1% with a forecast of 1.2% – YoY. Thus, after growing in May and June by 0.3% each month, inflation began to weaken again. Against this background, officials of the Swiss National Bank may move to tighten monetary policy at the meeting on September 26, which also supports the labor market. The unemployment rate, excluding seasonal fluctuations, rose from 2.3% to 2.4%, and with them, it consolidated at 2.5%. A potential increase in the interest rate supports the position of the franc and puts pressure on the USD/CHF pair.

The trading instrument is moving in a long-term downward trend. After a correction at the end of last month and reaching the resistance level of 0.8515, the price headed towards the support level at the August low of 0.8407, and then to 0.8330 and 0.8190. If 0.8407 is maintained, the quotes will begin an upward correction to the area of ​​0.8515 and 0.8715. The RSI (14) indicator formed a reversal pattern to buy, as it could not reach the low formed in early August, resulting in a divergence with the price chart, which is renewing its lows.

The medium-term trend is downward. Last week, there was a correction, which stopped at the resistance level of 0.8537, and then reached the low of last week 0.8405, after overcoming which a continuation of the decline to zone 2 (0.8317–0.8297) may follow. In this case, large sellers may begin to close sales, which will cause an upward correction. If buyers hold the support level of 0.8405, an upward impulse will form to the trend resistance area of ​​0.8636–0.8614, after reaching which long positions, with the target at 0.8405 are relevant.

Support and resistance

Resistance levels: 0.8515, 8715, 0.8870.

Support levels: 0.8405, 0.8330, 0.8190.

Trading tips

Long positions may be opened from 0.8405, with the target at 0.8515 and stop loss 0.8375. Implementation period: 9–12 days.

Short positions may be opened below 0.8375, with the target at 0.8290 and stop loss 0.8415.