USD/CHF gains ground amid USD strength ahead of CPI data

USD/CHF trades with gains near the 0.8760 area, and bulls are recovering momentum.
A negative market mood gives the USD traction, and the DXY jumped above 102.50.
Ahead of CPI data on Thursday, Fed officials delivered mixed signals.

Patricio Martín FXStreet

On Tuesday, the USD/CHF traded higher for a consecutive day. The USD is gaining ground against its rivals due to a cautious market mood while markets try deciphering Federal Reserve (Fed) officials' mixed messages. On the Swiss side, no relevant data will be released during the session.

Federal Reserve officials are conveying conflicting messages to the markets. Michelle Bowman has indicated that further rises will likely be necessary, whereas John Williams has expressed that upcoming Federal Reserve choices remain uncertain. On Tuesday, Thomas Barking stated that he is not sure where the rates in the US will go, while Patrick Harker sounded a bit more hawkish, showing himself concerned with inflation not cooling down.

Meanwhile, as per the CME FedWatch tool, investors remain confident that the Federal Reserve won’t hike in the remainder of 2023. They are discounting low odds of 14% of an increase in September and a 30% probability of a hike in November.

For the rest of the week, the highlight is the release of inflation data on Thursday, with the Headline Consumer Price Index (CPI) index expected to accelerate to 3.3% YoY in July and the Core CPI expected to remain at 4.8%. In that sense, inflation data will be key for investors to place their bets regarding the next Federal Reserve (Fed) decision.

USD/CHF Levels to watch

According to the daily chart, the outlook for the USD/CHF is neutral to bullish for the short term as the bulls are gaining momentum but still have some work to do. The Relative Strength Index (RSI) has turned flat above its midline, while the Moving Average Convergence (MACD) histogram exhibits more oversized green bars. However, on the broader scale, the pair remains below the 100 and 200-day Simple Moving Averages (SMA), suggesting that the bears have the upperhand in the long term.

Support levels: 0.8673 (20-day SMA), 0.8650, 0.8600.
Resistance levels: 0.8780, 0.8800, 0.8825.

USD/CHF Daily chart

USD/CHF

Overview
Today last price	0.876
Today Daily Change	0.0031
Today Daily Change %	0.36
Today daily open	0.8729

Trends
Daily SMA20	0.8677
Daily SMA50	0.8867
Daily SMA100	0.8938
Daily SMA200	0.9149

Levels
Previous Daily High	0.8774
Previous Daily Low	0.8718
Previous Weekly High	0.8806
Previous Weekly Low	0.8665
Previous Monthly High	0.9005
Previous Monthly Low	0.8552
Daily Fibonacci 38.2%	0.8752
Daily Fibonacci 61.8%	0.8739
Daily Pivot Point S1	0.8707
Daily Pivot Point S2	0.8684
Daily Pivot Point S3	0.8651
Daily Pivot Point R1	0.8762
Daily Pivot Point R2	0.8796
Daily Pivot Point R3	0.8818

Author

Patricio Martín

FXStreet

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

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