Current trend

After a sharp decline in August, the USD/CHF pair is trading in a correction trend at 0.8456 as the franc remains stable despite poor macroeconomic statistics.

Today, the Swiss Federal Statistical Office published the August report on the producer and import price index, which showed an increase of 0.2% to 107.4 points MoM and from –1.7% to –1.2% YoY. The prices of pharmaceutical products, chemical products, and raw milk increased the most. As before, the decline leaders were petroleum products, non-ferrous metals, and plastic products. Thus, the value is still returning to a positive trajectory, consolidation far from zero levels, so a transition to the positive zone is unlikely to happen this year.

The American dollar is falling, trading at 101.00 in USDX. Ahead of the US Fed’s monetary policy meeting, analysts are increasingly confident that the interest rate adjustment will be a low of –25 basis points. On Friday, the head of the Federal Reserve Bank of New York (FRB), John Williams, indirectly hinted at it, saying that the labor market and inflation are stable, allowing the regulator to reduce monetary pressure slightly. Despite the cautious comments, according to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of the borrowing cost correction by –50 basis points to 4.75–5.00% is 59.0%, significantly affecting the market.

Support and resistance

On the daily chart, the trading instrument is correcting below the support line of the downward channel 0.8730–0.8450. Technical indicators hold the sell signal. Fast EMAs on the Alligator indicator stay below the signal line, and the AO histogram forms correction bars in the sell zone.

Resistance levels: 0.8510, 0.8630.

Support levels: 0.8430, 0.8330.

Trading tips

Short positions may be opened after the price declines and consolidates below 0.8430, with the target at 0.8330. Stop loss is 0.8500. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 0.8510, with the target at 0.8630. Stop loss is around 0.8460.