USD/CHF advances as markets await a fresh catalyst

USD/CHF shows mild gains near the 0.8800 area.
The pair continues to trade sideways since early August.
Hawkish comments from Fed’s Thomas Barking gave the USD a boost.
Investors await Powell’s speech on Friday and Wednesday’s US August PMIs.

Patricio Martín FXStreet

On Tuesday, the USD/CHF traded with mild gains, near the critical 0.8800 zone. On the US side, Thomas Barking from the Federal Reserve (Fed) commented that more tightening may be needed while investors await Wednesday’s PMIs from August and Jerome Powell’s Friday speech. On the CHF side, Switzerland reported a higher than expected Trade Balance deficit in July, which seems to be pressuring the CHF. Besides that, no relevant data will be released on the Swiss front for the rest of the week.

That said, the USD measured by the DXY index upside potential is limited in a risk-positive market environment, with major US stock indexes closing green on Monday’s session. On a positive note, Thomas Barkin from the Fed delivered hawkish comments and stated , “If inflation remains high and demand gives no signal that it is likely to drop, that would require a tighter monetary policy”. As a reaction, US Treasury yields recovered some ground, and hawkish bets may limit further losses for the USD.

Attention is now set to the Jackson Hole Symposium, which will kick off on Thursday, and S&P Global Manufacturing figures from the US from July on Wednesday. Those figures are expected to show a decelerating economic activity but remain in expansion territory and will help investors model their expectations towards the next Federal Reserve (Fed) meeting. As for now, markets are still confident that the Fed will pause in September and then bet on higher odds of a hike in November of 25 basis points (bps)

USD/CHF Levels to watch

Analysing the daily chart, it is apparent that the USD/CHF has a neutral to bullish technical stance, with the bulls gradually recovering ground but still not in command. The Relative Strength Index (RSI) indicates positive momentum with an ascending slope above its midline, while the Moving Average Convergence (MACD) lays out flat green bars.On the other hand, the pair is above the 20-day Simple Moving Average (SMA) but below the 100 and 200-day Simple Moving Average (SMAs), suggesting that despite the recent bearish sentiment, the bulls are still resilient, holding some momentum.

Support levels: 0.8750 (20-day SMA), 0.8730, 0.8715.

Resistance levels: 0.8800, 0.8820, 0.8850.

USD/CHF Daily chart

USD/CHF

Overview
Today last price	0.8796
Today Daily Change	0.0011
Today Daily Change %	0.13
Today daily open	0.8785

Trends
Daily SMA20	0.8745
Daily SMA50	0.881
Daily SMA100	0.8899
Daily SMA200	0.9097

Levels
Previous Daily High	0.8828
Previous Daily Low	0.878
Previous Weekly High	0.8828
Previous Weekly Low	0.8738
Previous Monthly High	0.9005
Previous Monthly Low	0.8552
Daily Fibonacci 38.2%	0.8798
Daily Fibonacci 61.8%	0.881
Daily Pivot Point S1	0.8767
Daily Pivot Point S2	0.875
Daily Pivot Point S3	0.8719
Daily Pivot Point R1	0.8815
Daily Pivot Point R2	0.8846
Daily Pivot Point R3	0.8863

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

AUD/USD remains below 0.7000 amid light trading

AUD/USD fills a modest bearish gap on Monday, but remains below 0.7000 in the Asian session amid holiday-thinned liquidity. The US Dollar attempts a bounce even as US bond yields pull back from multi-year highs, limiting the pair. Moreover, diminishing odds of another RBA rate hike in November cap the Aussie.

USD/JPY hovers above 158.00 amid Japan/ US holiday

USD/JPY extends its range-bound price action into a new week, trading above 158.00 as bulls remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, softer US bond yields keep US Dollar bulls on the back foot and cap the pair's upside. However, geopolitical uncertainties could limit losses for the safe-haven buck amid thin liquidity due to a holiday in Japan and the US.

Gold buyers retain control as the US CPI week begins

Gold is extending its recovery from a two-month low of $4,067 into a new week on Monday, trying to remain above the $4,200 level amid a pause in the US Dollar retreat from an 18-month peak.

Bitcoin reclaims $83,500, Ethereum takes back 50-day EMA, XRP holds support

Bitcoin (BTC) takes back $83,500 on Monday after a sharp correction, with the Crypto King slipping below $81,000 the previous week. Ethereum (ETH) and Ripple (XRP) followed BTC’s footsteps, recovering and reclaiming the $2,500 and $1.400 marks after a pullback last week.

Middle East War updates: New attack launched on Saudi airport

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week. In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?