Current trend

The USD/CHF pair is trading in a corrective downtrend against the background of the strengthening of the Swiss franc, being at 0.8875, which began last week and was supported by the publication of a forecast from the State Secretariat for Economic Affairs (SECO).

Thus, the expert group believes that the Swiss economy will grow by 1.2% in 2024, which is better than the March forecast of 1.1%. The key reasons for such restrained estimates are still the low activity of industrial production and the high cost of financing, which will deter investment in the sector. Inflation is expected to reach 1.4% this year, also lower than previous estimates of 1.5%. The improvement in forecasts occurred against the background of normalization in the labor market, where preliminary estimates of a decrease in unemployment to 2.5% were adjusted to 2.4%.

The US dollar is adjusting and is currently holding at 105.1 points in the USDX. The market reacted quite negatively to the change in rhetoric of the members of the US Open Market Operations Committee (FOMC), who spoke on Monday. So, the president of the Philadelphia Federal Reserve Bank (FRB), Patrick Harker, said that the US Federal Reserve is considering lowering interest rates not three, but only once before the end of the year, and only if the forecast for inflation and employment comes true.

Support and resistance

On the daily chart, the asset is adjusting downwards, moving away from the support line of the ascending channel with the boundaries of 0.9250–0.9050.

Technical indicators have been reversed for a long time and strengthen the sell signal: fast EMAs on the Alligator indicator are actively moving away from the signal line, and the AO histogram is falling in the sales zone, forming descending bars there.

Support levels: 0.8865, 0.8730.

Resistance levels: 0.8940, 0.9045.

Trading tips

If the asset continues to decline and the price consolidates below the support level of 0.8865, one can open short positions with the target of 0.8730 and stop-loss of 0.8920. Implementation period: 7 days or more.

In the event of a reversal and continued local growth of the asset, as well as price consolidation above the resistance level of 0.8940, one may open long positions with the target of 0.9045 and stop-loss of 0.8900.