Current trend

The USD/CHF pair is showing moderate growth, correcting after the "bearish" last week, as a result of which the instrument managed to update the record lows of late December for some time. The instrument is testing 0.8460 for a breakout, while the growth of the American currency is largely facilitated by technical factors.

Investors are assessing the August data on the US labor market, published last Friday: thus, Nonfarm Payrolls amounted to 142.0 thousand, which was significantly lower than expectations at 160.0 thousand, while analysts drew attention to the revision of the July figure from 114.0 thousand to 89.0 thousand, which ultimately led to a sharp surge in volatility in the Friday session. Average Hourly Earnings accelerated from 0.2% to 0.4% month-on-month and from 3.6% to 3.8% year-on-year, compared to forecasts of 0.3% and 3.7%, respectively. Against this backdrop, expectations regarding the size of the expected cut in the US Federal Reserve interest rate in September have remained virtually unchanged: as before, the scenario with an immediate adjustment of the rate by –50 basis points is estimated at approximately 35.0%.

Switzerland released its Unemployment statistics for August last Thursday, and as expected, the figure remained at 2.5%. Analysts, like with the US regulator, expect the Swiss National Bank to cut borrowing costs at its meeting on September 26 as inflation pressures in the country continue to ease rapidly. The country's Consumer Price Index slowed down in August from 1.3% to 1.1%, compared to preliminary estimates of 1.2%.

Support and resistance

On the daily chart Bollinger Bands are trying to reverse horizontally. The price range is narrowing, reflecting appearance of multi-directional dynamics in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic interrupted its active decline and reversed into a horizontal plane, not far from the level of "20". One should wait for the clarification of trade signals.

Resistance levels: 0.8500, 0.8541, 0.8570, 0.8600.

Support levels: 0.8450, 0.8400, 0.8365, 0.8331.

Trading tips

Long positions can be opened after a breakout of 0.8500 with the target of 0.8600. Stop-loss — 0.8450. Implementation time: 2-3 days.

A rebound from 0.8500 as from resistance, followed by a breakdown of 0.8450 may become a signal for opening of new short positions with the target at 0.8365. Stop-loss — 0.8500.