Current trend

After the publication of inflation data in the United States, the USD/CHF pair dropped from 0.9027 to 0.8890 and is preparing to continue its negative trend with the target at 0.8820.

Thus, the October consumer price index showed zero dynamics MoM, while analysts expected a slight increase of 0.1% compared to an increase of 0.4% earlier. The figure fell from 3.7% to 3.2% YoY, exceeding forecasts of 3.3%, while core values slowed from 0.3% to 0.2% and from 4.1% to 4.0%. Macroeconomic statistics bolstered investor confidence that US Federal Reserve officials will not increase interest rates this year or next, as borrowing costs of 5.50% put necessary pressure on inflation, which negatively affects the dollar.

In Switzerland, the producer price index published yesterday, which records changes in the cost of goods, components, and raw materials on the wholesale market, amounted to 0.2% MoM, higher than the forecast of 0.1% and the previous value of –0.1%, supporting the franc.

The trading instrument is moving within the framework of a long-term upward trend, and the decline from October to the current moment is a correction, within which the price yesterday broke through the support level of 0.8920, after which it is likely to reach 0.8820. If it is held, long positions with the target at 0.8920 are relevant, and otherwise, a decline to the trend border of 0.8715 is possible.

The medium-term trend is downward, and this week, the quotes renewed the October low of 0.8890. The next downward target is zone 2 (0.8764–0.8742), after reaching which it is possible to fix sales and an upward correction. The key trend resistance is shifting to 0.9121–0.9099, after reaching which new sales of the asset can be considered with the first target at the current week’s low of 0.8880.

Support and resistance

Resistance levels: 0.8980, 0.9100.

Support levels: 0.8820, 0.8715.

Trading tips

Long positions may be opened from 0.8820 with the target at 0.8980 and stop loss around 0.8770. Implementation time: 9–12 days.

Short positions may be opened below 0.8770 with the target at 0.8670 and stop loss around 0.8820.