- USD/CHF fell to 0.8775, below the 20-day SMA of 0.8780.
- US ADP job creation numbers for August were lower than expected, and second quarter GDP was revised down.
- Falling US yields and dovish bets on the Fed weigh on the USD.
In the Wednesday session, the dollar was weak against most currencies, boosted by the economic data that was reported. The dollar had gained momentum against most of its rivals as its economy had been resilient during the Federal Reserve (Fed) tightening cycle. However, the weak economic data report warns investors that monetary policy lags may be taking their toll. On the Swiss side, the ZEW reported subdued expectations in August.
The August survey by Automatic Data Processing (ADP), which measures job creation, indicated the creation of 177,000 jobs in the United States. This figure was below the 195,000 expected and represented a significant drop compared to 371,000. In addition, the Gross Domestic Product (GDP) for the second quarter was revised downward, standing at 2.1%.
In reaction to the data, the dollar, as measured by the DXY index, fell to 103.05, below its 200 and 20-day SMAs, while US Treasury yields continued to decline and fell to their lowest level in three. weeks. In line with the above, markets continue to value high probabilities of at least one more hike by the Federal Reserve (Fed) within this cycle, but rate cut expectations have now shifted from July to June 2024.
On Thursday, the focus will be on core personal consumption expenditures (PCE) for July, a key inflation indicator for the Fed. On Friday, markets will hear non-farm payrolls (NFP) for August.
On the CHF side, the ZEW survey of expectations for August fell better than expected to -38.6 versus -31.3 expected, limiting the Swiss currency’s upside.
USD/CHF Levels to Watch
Based on daily chartal analysis, USD/CHF has a short-term technical bias to the downside, with the RSI and MACD in negative territory. The RSI is also sloping south below its midline, highlighting the presence of intense selling pressure. At the same time, the MACD, with its red bars, highlights the strengthening bearish momentum for USD/CHF. Furthermore, the pair is sitting below the 20,100 and 200-day SMAs, which points to prevailing bear strength in the broader context as buyers face a challenging situation.
Support levels: 0.8750, 0.8730, 0.8700.
Resistance levels: 0.8782 (20-day SMA), 0.8800, 0.8890 (100-day SMA).
USD/CHF Daily Chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
