USD/CHF drops back below 0.9600 ahead of Swiss inflation

USD/CHF retreats to 0.9590, after printing the first positive week in three, as traders await the Swiss Consumer Price Index (CPI) for June during Monday’s Asian session. The Swiss currency (CHF) pair’s latest gains could also be linked to the market’s consolidation amid the US holiday.

The quote rallied the most in three weeks the previous day after the US ISM Manufacturing PMI propelled economic slowdown fears, underpinning the US dollar’s safe-haven demand.

However, an improvement in the S&P Global PMI and surprise gains in the Wall Street benchmarks appear to have probed the pair buyers afterward.

The US ISM Manufacturing PMI for June slumped to the lowest levels in two years, to 53.0 versus 54.9 expected and 56.1 prior. The details suggested the Employment Index declined to 47.3 from 49.6 and New Orders Index fell to 49.2 from 55.1. Finally, Prices Paid Index dropped to 78.5 from 82.2, versus market forecasts of 81.0. It should be noted that the final readings of the S&P Global Manufacturing PMI for June dropped to the lowest level since July 2020, to 52.7 versus the flash estimate of 52.4 and 57 in May.

Against this backdrop, the US 10-year Treasury yields marked the biggest weekly fall since February but the US Dollar Index (DXY) didn’t lose its charm.

Moving on, Swiss CPI for June, expected 3.2% YoY versus 2.9% prior, could direct intraday USD/CHF moves amid the US Independence Day. However, major attention will be given to the recession chatters and this week’s Fed Minutes, as well as Friday’s US jobs report for June, as Fed hawks struggle to gain acceptance.

Technical analysis

Unless providing a daily closing below the 100-DMA, around 0.9530 by the press, USD/CHF remains on the bull’s radar.