- Greenback sharply higher against European currencies.
- Data and higher US yields support stronger US Dollar as attention turns to Powell’s speech.
The USD/CHF pair broke above 0.9855 and jumped to 0.9887, hitting the highest level since Friday and extended the rebound from the 2-week low it reached yesterday at 0.9816.
The key driver behind US Dollar’s strength was US data. Retail sales in June rose by 0.4%, above market expectations 0.1%. Industrial Production came in flat for June, below a modest increase of market consensus, having no negative impact on the US dollar. Attention nows turns to Chairman Powell’s speech.
From a technical perspective, today’s rally follows a Doji candle formation yesterday, when after bottoming at 0.9815 the lowest level in two weeks, the pair rebounded, ending the day marginally positive and far from the lows. Now USD/CHF trades back above the 20-day moving average, improving the outlook for the greenback.
A key support could be seen around 0.9840: a daily close clearly below would clear the way to more losses, exposing 0.9815 (July 14 low) and 0.9785, the next support. On the upside, the next strong barrier is the 0.9910 area.
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