USD/CHF Overview & Technical Analysiss

Fundamental Summary


The BLS report on Friday shows figures that are worse than forecast. In August, total nonfarm payroll employment increased by 315,000, while the unemployment rate rose to 3.7%. A rate that is higher than expected should be interpreted as negative/bearish for the USD. Also, The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose from 49.9 to 54.2 in August, exceeding market forecasts. The Manufacturing Purchasing Managers' Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. Furthermore, according to payroll processor ADP, private sector hiring slowed in August due to a cooling of the labor market. As part of a revamped monthly report, the company said that private payrolls rose by 132,000 during the month, far below the consensus forecast of 300,000.


According to official figures, employment in Switzerland surprisingly increased in the recent quarter. Federal Statistical Office stated in a report that seasonally adjusted employment in Switzerland increased to 5.316M from 5.273M in the previous quarter. Moreover, Switzerland's consumer price index increased over the previous month. According to a report by the Swiss Federal Statistical Office, Swiss consumer price index surged 0.3%, above experts' expectations of 0.2%. Additionally, Last month, July retail sales in Switzerland increased more than projected. According to the Federal Statistics Bureau, retail sales increased to a seasonally annual rate of 2.6% in July, up from 0.7% the previous month. Analysts predicted a 0.9% increase in retail sales from the previous month.

Our Opinion

Given the current balance of positive and negative influences affecting the USD/CHF and as long as the Fed maintains its aggressive policy and cyclical worries put pressure on risky assets, the fundamental outlook for the USD is "BEARISH" and for the CHF is "BULLISH".

Technical Analysis

Prior to Friday's European session, the USD/CHF took offers to retest an intraday low of around 0.9800, breaking a five-day advance. In doing so, the Swiss franc (CHF) pair eases away from the top line of a three-week-old bullish channel. Additionally, the decline explains the RSI (14)'s departure from the overbought zone. The USD/CHF sellers are further encouraged by the approaching bear cross of the MACD line above the signal line. With this, the most recent downturn is anticipated to continue and will probably surpass the level of 0.9800. The bottom line of the stated channel and the two-month-old horizontal support region, which are converging around 0.9740-45, look to be difficult resistance for the USD/CHF bears to overcome. After that, the chart can abruptly show a southward movement approaching the 200-SMA level at 0.9595.

Bearish 57
Close Price 216.3
52W Low 157.0
52W High 292.55
5D MA 215.82
50D MA 195.76
200D MA 216.62
MACD 5.53
RSI 77.16
STOCH 80.91

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