USD/CHF fades bounce off intraday low near 0.8950 as US Retail Sales, debt ceiling negotiations loom


  • USD/CHF retreats from intraday high, stays defensive after reversing from two-week top the previous day.
  • Market sentiment turns sluggish as traders await US debt ceiling talks, Retail Sales data.
  • Recently downbeat US data, mixed Fedspeak favor Swiss Franc buyers.

USD/CHF remains pressured near 0.8950 and prints minor losses while reversing from the intraday high during a two-day downtrend to early Tuesday. In doing so, the Swiss Franc (CHF) pair cheers the US Dollar’s downbeat performance amid the market’s cautious mood ahead of the key data and events.

That said, the US Dollar Index (DXY) drops to 102.40 as it defends the week-start pullback from the monthly high. With this, the greenback’s gauge versus six major currencies bears the burden of the softer US data and mixed Federal Reserve (Fed) commentary even as challenges to sentiment put a floor under the DXY.

Monday’s NY Empire State Manufacturing Index for May marked the biggest fall since April 2020, to -31.8 for May. The same joins the downbeat signals from the US inflation numbers flashed the last week, as well as justifying the Federal Reserve’s (Fed) dovish hike, to weigh on the US Dollar and the USD/CHF price.

However, the Fed policymakers remain mostly hawkish despite not suggesting more rate hikes, which in turn puts a floor under the USD/CHF. On Monday, the Federal Reserve (Fed) signals have been mostly upbeat as Atlanta Fed President Raphael Bostic told CNBC on Monday that there is still a long distance to go on inflation and added that they may have to "go up on rates," as reported by Reuters. On the contrary, Chicago Federal Reserve Bank President Austan Goolsbee said in an interview with CNBC on Monday that a lot of impact of rate hikes is still in the pipeline. Furthermore, Minneapolis Fed President Neel Kashkari stated that signaled that the Fed has a long way to go to get inflation to 2.0%.

On a different page, the White House announced a meeting between President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy to overcome the looming US default. Ahead of the event, the US policymakers appear somewhat optimistic about extending the debt ceiling limit before the June expiry, which in turn weighed on the USD/CHF. However, the latest comments from United States House Speaker Kevin McCarthy saying, “I don’t think we’re in a good place,” seem to favor the US Dollar, via fears of deadlock on the US debt ceiling extension as Republicans may stick to their demand.

Amid these plays, S&P 500 Futures print mild losses even as Wall Street closed positive and the yields remain pressured, which in turn shows the market’s indecision and awaits the important data/events for clear directions.

Moving on, US Retail Sales for April, expected at 0.7% MoM versus -0.6% prior, will be the first to entertain USD/CHF traders ahead of the key US debt ceiling negotiations. Should the US policymakers offer a positive surprise to the markets, the odds of witnessing a slump in the US Dollar can’t be ruled out.

Technical analysis

Despite reversing from a one-month-old descending resistance line, around 0.8985 by the press time, the USD/CHF pair’s short-term downside remains elusive unless it breaks the one-week-old rising support line, close to 0.8920 by the press time.

USD/CHF

Overview
Today last price 0.8951
Today Daily Change -0.0006
Today Daily Change % -0.07
Today daily open 0.8957
 
Trends
Daily SMA20 0.8922
Daily SMA50 0.9062
Daily SMA100 0.9161
Daily SMA200 0.9412
 
Levels
Previous Daily High 0.8988
Previous Daily Low 0.8943
Previous Weekly High 0.8988
Previous Weekly Low 0.8868
Previous Monthly High 0.9198
Previous Monthly Low 0.8852
Daily Fibonacci 38.2% 0.896
Daily Fibonacci 61.8% 0.8971
Daily Pivot Point S1 0.8937
Daily Pivot Point S2 0.8917
Daily Pivot Point S3 0.8892
Daily Pivot Point R1 0.8982
Daily Pivot Point R2 0.9008
Daily Pivot Point R3 0.9027

 

 

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