Key Highlights
- USD/CHF started a fresh decline after it failed to surpass 0.9980.
- There was a break below a key bullish trend line at 0.9932 on the 4-hours chart.
- The US CPI increased 1.8% in Oct 2019 (YoY), better than the market forecast of 1.7%.
- The US Initial Jobless claims for the week ending Nov 09, 2019 could rise to 215K from 211K.
USD/CHF Technical Analysis
After a steady rise, the US Dollar struggled to climb above 0.9980 against the Swiss Franc. As a result, USD/CHF started a fresh decline and traded below the key 0.9950 support area.
Looking at the 4-hours chart, the pair even broke a couple of key supports near the 0.9930 level and the 200 simple moving average (green, 4-hours).
Moreover, there was a break below a key bullish trend line at 0.9932 on the same chart. Finally, the pair traded below the 50% Fib retracement level of the upward move from the 0.9849 low to 0.9978 high.
USD/CHF even traded below 0.9900 and the 100 simple moving average (red, 4-hours). The next key support on the downside is near the 0.9980 level since it represents the 76.4% Fib retracement level of the upward move from the 0.9849 low to 0.9978 high.
Any further losses may perhaps push the pair towards the 0.9840 support area. On the upside, the previous supports near 0.9930 and the 200 SMA are likely to act as hurdle for buyers.
Fundamentally, the US Consumer Price Index for Oct 2019 was released by the US Bureau of Labor Statistics. The market was looking for the CPI to increase 1.7%, compared with the same month a year ago.
However, the actual result was better than the forecast, the US CPI increased 1.8% (YoY), more than the last 1.7%. Looking at the monthly change, the CPI increased 0.4%, whereas the market was looking for 0.3%.
The report added:
The energy index increased 2.7 percent in October after recent monthly declines and accounted for more than half of the increase in the seasonally adjusted all items index; increases in the indexes for medical care, for recreation, and for food also contributed.
Overall, USD/CHF might correct higher, but it is likely to face resistance near 0.9930. Conversely, both EUR/USD and GBP/USD are facing an increase in selling pressure.
Upcoming Economic Releases
- German GDP for Q3 2019 (QoQ) (Preliminary) – Forecast -0.1%, versus -0.1% previous.
- Euro Zone GDP Q3 2019 (Preliminary) (QoQ) – Forecast 0.2%, versus 0.2% previous.
- UK Retail Sales for Oct 2019 (MoM) – Forecast +0.2%, versus 0% previous.
- UK Retail Sales for Oct 2019 (YoY) – Forecast +3.7%, versus +3.1% previous.
- US Initial Jobless Claims – Forecast 215K, versus 211K previous.
