USDCHF lost its shine after the US CPI. It hits an intraday low of 0.79482 and is currently trading around 0.79541.
Released the same day, US inflation numbers revealed acceleration to a nine-month high of 2.9% year-over-year in August, with monthly CPI rising 0.4% driven by ongoing shelter expenditures, growing energy prices, and general service industry demands. At 3.1% yearly, core inflation stayed stubbornly high, well beyond the Federal Reserve's 2% target, much complicating next week's Fed meeting and confirming assumptions for Rather than the more forceful 50bp cut some had predicted, a measured 25 basis point rate cut. With the ECB seeming close to the end of its easing cycle and the Fed starts rate cuts amid Continuous inflation presents problems that could help the euro against the dollar as central bank paths diverge
Technical Analysis Points to Further Downside
The pair is trading below 55-EMA, below the 200 EMA, and 365 EMA on the 4-hour chart, indicating a weak trend. The immediate resistance is at 0.8000; any break above targets 0.8070/0.8090/0.8135/0.8170/0.8215/0.8250.
Support Levels and Potential Declines
On the downside, near-term support is around 0.7920; any violation below will drag the pair to 0.7920/0.7860/0.7800.
Indicators (1-hour chart)
CCI (50) - Bullish
Directional Movement Index - Bullish
Trading Strategy Recommendation
It is good to sell on rallies around 0.7968-70 with SL around 0.8010 for a TP of 0.7860.
