Fundamental Analysis of USD/CHF for August 31, 2018

USD/CHF has been quite impulsive and non-volatile with the recent bearish gains which has lead the price below 0.9700 area with a daily close recently. As USD has been trading under pressure due to negative political developments, CHF maintained its momentum of gains leading to certain impulsive pressure in the pair.

On the other hand, economic reports from Switzerland do not reveal great figures, but they did not hamper CHF gains in the process which explains the current sentiment in the market. This week Credit Suisse Economic Expectations report was published with a decrease to -14.3 from the previous figure of -4.0 and KOF Economic Barometer report was also published with a decrease to 100.3 from the previous figure of 101.7 which was expected to be at 101.2.

On the USD side, recently US Core PCE Price Index was published with an increase as expected to 0.2% from the previous value of 0.1%, Personal Spending was published unchanged as expected at 0.4%, Personal Income was decreased as expected to 0.3% from the previous value of 0.4% and Unemployment Claims increased to 213k from the previous figure of 210k which did not quite meet the forecast for 214k. Today US Chicago PMI report is going to be published which is expected to decrease to 63.0 from the previous figure of 65.5 and Revised UoM Consumer Sentiment report is expected to increase to 95.5 from the previous figure of 95.3.

Meanhwile, USD has not been able to win back earlier losses amid mixed results that led to further weakness of the US currency against CHF. Despite some downbeat economic reports from Switzerland, certain gains indicate the current market sentiment in favor of CHF which is expected to continue pushing the price lower until the US comes up with strong economic reports to co-op up with.

Now let us look at the technical view. The price has breached below 0.9700 area with a daily close recently which indicates further bearish momentum in this pair with a target towards 0.9550 support area in the coming days. As no Bullish Divergence is observed in MACD in the process, the bearish pressure is expected to push the price lower in the coming days. As the price remains below 0.9850 with a daily close, the bearish bias is expected to continue.

SUPPORT: 0.9550

RESISTANCE: 0.9700, 0.9850

BIAS: BEARISH

MOMENTUM: IMPULSIVE

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