Current trend

The USD/CHF pair shows mixed dynamics, consolidating near 0.8450. The instrument is adjusting uncertainly after a two-day rise, which allowed the American currency to retreat from the local lows of September 18.

The strengthening of the American currency at the beginning of the week was facilitated by the results of the speech of the Chair of the US Federal Reserve, Jerome Powell, at the meeting of the National Association for Business Economics (NABE). The official stressed that the regulator, while maintaining current economic indicators, would like a more measured reduction in the interest rate by 25 basis points. It is clear that the US Federal Reserve is still wary of a return to high inflation and therefore prefers to act more cautiously given the state of the US economy.

The US macroeconomic statistics published the day before turned out to be mixed: the ISM Manufacturing PMI remained at 47.2 points in September, while analysts had expected 47.5 points, and JOLTS Job Openings in August increased from 7.711 million to 8.040 million, with a forecast of 7.655 million.

The US will release its September labour market report later this week, which could have a significant impact on investor expectations for the pace of monetary easing by the US Federal Reserve. Nonfarm Payrolls are expected to decline from 142.0 thousand to 140.0 thousand, Average Hourly Earnings are expected to remain at 3.8% year-on-year and adjust from 0.4% to 0.3% month-on-month, and the Unemployment Rate is expected to remain at 4.2%.

Some support for the Swiss franc, in turn, is provided by macroeconomic data: the Purchasing Managers' Index from the Association of Purchasing Managers (SVME) rose in September from 49.0 points to 49.9 points with preliminary estimates of 48.2 points, and the Real Retail Sales in Switzerland increased in August from 2.9% to 3.2%, while experts expected 2.6%. Tomorrow at 08:30 (GMT 2), September inflation statistics will be presented: forecasts suggest that the annual dynamics will remain at 1.1%.

In turn, the Chairman of the Swiss National Bank, Martin Schlegel, in his first speech in his new position, said that the regulator highly estimates the likelihood of a further decline in inflation after slowing down to 1.1% in August and maintaining it in the target range of 0.0-2.0% over the past 15 months. Currently, 85.0% of experts expect the regulator to adjust the cost of borrowing to 0.75% at its next meeting in December.

Support and resistance

Bollinger Bands on the daily chart demonstrate an unsteady decrease. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics being located in the middle of its area.

Resistance levels: 0.8481, 0.8500, 0.8517, 0.8541.

Support levels: 0.8450, 0.8429, 0.8400, 0.8365.

Trading tips

Short positions may be opened after a breakdown of 0.8450 with the target at 0.8400. Stop-loss — 0.8481. Implementation time: 1-2 days.

A rebound from 0.8450 as from support followed by a breakout of 0.8481 may become a signal for opening new long positions with the target at 0.8541. Stop-loss — 0.8450.