Current trend

The USD/CHF pair is moving within a medium-term downward trend. However, this week, the price corrected upwards to 0.8900.

Political factors are supporting the American dollar. Experts believe that the refusal of the incumbent President Joe Biden to participate in the elections and his replacement with Kamala Harris increased the victories of the Republican candidate, Donald Trump. In this case, investors expect a significant easing of personal and corporate taxes followed by an acceleration of economic growth. However, the positive dynamics do not look sustainable due to the persistence of long-term monetary factors. Thus, the conditions for monetary policy correction have been met in the economy. Inflation is slowing growth, business activity is declining, and the labor market is showing signs of cooling. If the June personal consumption expenditures price index meets the forecasts of a decrease from 2.6% to 2.5% YoY, a September borrowing cost decrease is practically guaranteed.

Meanwhile, the Swiss National Bank (SNB) officials may interrupt the cycle of monetary policy easing that began in the fourth quarter against renewed inflation growth. The April consumer price index corrected from 1.0% to 1.4% and has not returned to its low annual values ​​since then.

Support and resistance

The trading instrument is at 0.8911 (Murrey level [2/8]). After a breakout, growth to 0.8972 (Murrey level [3/8], the middle line of Bollinger Bands) may continue. If the price consolidates below 0.8850 (Murrey level [1/8]), a decline to 0.8789 (Murrey level [0/8], Fibonacci correction 50.0%), 0.8705 (Fibonacci correction 61.8%) may follow.

Technical indicators support the downward trend. Bollinger Bands are reversing downwards, and the MACD histogram is stable in the negative zone. Stochastic has reversed upwards, allowing for a limited correction.

Resistance levels: 0.8911, 0.8972, 0.9033.

Support levels: 0.8850, 0.8789, 0.8705.

Trading tips

Short positions may be opened below 0.8850 or at a reversal at 0.8972, with the targets of 0.8789, 0.8705, and stop losses of 0.8895, and 0.9015, respectively. Implementation period: 5–7 days.