Key Highlights
- The US Dollar gained momentum above 0.9850 and broke 0.9900 against the Swiss Franc.
- USD/CHF remains supported near 0.9880 and a key bullish trend line on the 4-hours chart.
- The US PPI increased 1.8% in August 2019 (YoY), more than the 1.7% forecast.
- The US CPI could increase 0.1% in August 2019 (MoM), less than the last +0.3%.
USD/CHF Technical Analysis
The US Dollar started a strong rise from the 0.9796 swing low against the Swiss Franc. The USD/CHF pair broke the key 0.9850 resistance level to move enter a positive zone.
Looking at the 4-hours chart, the pair even broke the 0.9900 resistance and settled well above the 100 simple moving average (red, 4-hours). The pair settled above 0.9900 and traded close to the 0.9950 level.
If there is a downside correction, the pair could find support near 0.9900 or the 23.6% Fib retracement level of the upward move from the 0.9796 low to 0.9943 high.
The main support is near the 0.9880 and a connecting key bullish trend line on the same chart. Below the trend line support, the 100 SMA is just below the 50% Fib retracement level of the upward move from the 0.9796 low to 0.9943 high.
Conversely, an upside break above the 0.9950 level might open the doors for more gains. The next key resistances on the upside are near the 0.9980 and 1.0000 levels.
Fundamentally, the US Producer Price Index released by the Bureau of Labor statistics, Department of Labor. The market was looking for a 1.7% rise in the PPI compared with the same month a year ago.
The actual result was better than the forecast, as the US PPI increased 1.8% in August 2019 (YoY). Looking at the monthly change, there was a 0.1% rise, better than the forecast and less than the last +0.2%.
The report added:
The Producer Price Index for final demand rose 0.1 percent in August, as prices for final demand services advanced 0.3 percent, and the index for final demand goods fell 0.5 percent. The final demand index increased 1.8 percent for the 12 months ended in August.
Overall, USD/CHF remains well supported on dips and if today’s CPI release in the US beats the forecast, there could be an upside continuation above 0.9950.
Upcoming Economic Releases
- German Consumer Price Index for August 2019 (YoY) – Forecast +1.4%, versus +1.4% previous.
- German Consumer Price Index for August 2019 (MoM) – Forecast -0.2%, versus -0.2% previous.
- ECB Interest Rate Decision – Forecast 0%, versus 0% previous.
- US Initial Jobless Claims – Forecast 215K, versus 217K previous.
- US Consumer Price Index August 2019 (MoM) – Forecast +0.1%, versus +0.3% previous.
- US Consumer Price Index August 2019 (YoY) – Forecast +1.8%, versus +1.8% previous.
- US Consumer Price Index Ex Food & Energy August 2019 (YoY) – Forecast +2.3%, versus +2.2% previous.
