Key Highlights
- The US Dollar struggled to break the 0.9950 resistance against the Swiss Franc.
- There are many important supports for USD/CHF near 0.9860 and 0.9840.
- The US Wholesale Inventories increased 0.4% in May 2019, similar to the forecast.
- The US CPI in June 2019 might rise 0.2% (MoM), more than the last +0.1%.
USDCHF Technical Analysis
After a successful close above 0.9750, the US Dollar climbed higher steadily against the Swiss Franc. The USD/CHF pair traded above many hurdles, but it recently struggled to clear the 0.9950 resistance.
Looking at the 4-hours chart, the pair settled nicely above the 0.9840 pivot level plus the 100 simple moving average (red, 4-hours). During the recent rise, there was a break above a major bearish trend line with resistance at 0.9855.
The pair even broke the 0.9925 level and the 200 simple moving average (green, 4-hours). However, it struggled to gain momentum above 0.9950 and recently topped at 0.9951.
The pair corrected lower below 0.9925 and tested the 50% Fib retracement level of the upward move from the 0.9834 low to 0.9951 high. On the downside, there are a few important supports near the 0.9875, 0.9860 and 0.9840 levels.
Moreover, the 100 simple moving average (red, 4-hours) is also near the 0.9850 level to act as a strong support. Therefore, as long as USD/CHF is above the 0.9840 pivot level, it remains supported on dips and it is likely to bounce back.
Conversely, a successful close below 0.9840 and the 100 SMA might start a significant downward move below the 0.9820 and 0.9800 support levels.
Fundamentally, the US Wholesale Inventories report for May 2019 was released by the US Census Bureau. The market was looking for a 0.4% rise compared with the previous month.
The actual result was similar to the forecast, with a 0.4% rise in total inventories of merchant wholesalers, except manufacturers’ sales branches and offices (similar to the last).
The report added:
May 2019 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading day differences but not for price changes, were $503.4 billion, up 0.1 percent (±0.4 percent) from the revised April level.
Overall, the US Dollar has likely started a downside correction, but it could bounce back if the US CPI report meets the market expectation today.
Economic Releases to Watch Today
- German Consumer Price Index for June 2019 (YoY) – Forecast +1.3%, versus +1.3% previous.
- German Consumer Price Index for June 2019 (MoM) – Forecast +0.3%, versus +0.3% previous.
- ECB Monetary Policy Meeting Minutes.
- US Initial Jobless Claims – Forecast 223K, versus 221K previous.
- US Consumer Price Index June 2019 (MoM) – Forecast +0.2%, versus +0.1% previous.
- US Consumer Price Index June 2019 (YoY) – Forecast +1.6%, versus +1.8% previous.
- US Consumer Price Index Ex Food & Energy June 2019 (YoY) – Forecast +2%, versus +2% previous.
