US Dollar Outlook: USD/CHF
USD/CHF continues to recover from a fresh monthly low (0.8022) following a larger than expected rise in the US Producer Price Index (PPI), and the exchange rate may further retrace the decline from earlier this week as the Retail Sales report is expected to show another rise in household spending.
US Dollar Forecast: USD/CHF Recovers from Fresh Monthly Low
USD/CHF trades back above the 50-Day SMA (0.8053) as the core PPI prints at 3.7% in July versus forecasts for a 2.9% reading, and the exchange rate may no longer track the negative slope in the moving average after closing above the indicator for the first time since February.
US Economic Calendar
Meanwhile, data prints coming out of the US may continue to sway USD/CHF as Retail Sales is projected to increase 0.5% in July following the 0.6% expansion the month prior, and a positive development may generate a bullish reaction in the Greenback as it puts pressure on the Federal Reserve to keep interest rates higher for longer.
Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here
However, a weaker-than-expected Retail Sales report may drag on the US Dollar as it fuels speculation for an imminent Fed rate-cut, and the recent recovery in USD/CHF may turn out to be temporary if it fails to defend the advance from the monthly low (0.8022).
With that said, USD/CHF may reestablish the downward trend from earlier this year as the Fed appears to be on track to further unwind its restrictive policy, but the exchange rate may attempt to retrace the decline from the June high (0.8250) as it appears to be coiling above the July low (0.7872).
USD/CHF Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/CHF Price on TradingView
- USD/CHF may attempt to retrace the decline from earlier this week amid the failed attempt to close below the 0.8030 (38.2% Fibonacci extension) to 0.8080 (23.6% Fibonacci retracement) zone, with a breach of the monthly high (0.8172) bringing 0.8200 (23.6% Fibonacci extension) on the radar.
- Next area of interest comes in around the June high (0.8250), with a move/close above 0.8360 (100% Fibonacci extension) opening up the May high (0.8476).
- At the same time, a close below the 0.8030 (38.2% Fibonacci extension) to 0.8080 (23.6% Fibonacci retracement) zone may push USD/CHF toward 0.7900 (50% Fibonacci extension), with a breach of the July low (0.7872) opening up the 0.7760 (61.8% Fibonacci extension) to 0.7810 (161.8% Fibonacci extension) region.
Additional Market Outlooks
Australian Dollar Forecast: AUD/USD Climbs to Fresh Monthly High
USD/JPY Pulls Back from Fresh Weekly High as US CPI Holds Steady
Canadian Dollar Forecast: USD/CAD Bounces Back Ahead of 50 Day SMA
US Dollar Forecast: EUR/USD Climbs to Fresh Weekly High
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
