USD/CHF Price Analysis: Trades flat with mild gains above the 0.8800 area

The USD/CHF pair trades flat with mild gains above the 0.8800 area heading into the early European session on Thursday. The pair has been trading within a consolidation phase since July 27.

That said, the upbeat US data and the possibility of a further tightening cycle from the Federal Reserve (Fed) are the main drivers of the US Dollar's (USD) strength and boost USD/CHF higher. The Federal Open Market Committee (FOMC) Minutes emphasised that inflation remained unacceptably high while Fed officials opened the door for additional tightening of monetary policy to bring inflation to the longer-run target. 

From the technical perspective, USD/CHF holds above the 50- and 100-hour Exponential Moving Averages (EMAs) with an upward slope, which means the path of least resistance for the pair is to the upside. Additionally, the Relative Strength Index (RSI) stands above 50, while the Moving Average Convergence/Divergence (MACD) holds above bullish territory, supporting the buyers for the time being.

The immediate resistance level for USD/CHF will emerge at 0.8830 (high of August 14). The additional upside filter is located at 0.8875 (high of July 7) en route to a psychological round mark at 0.8900. A break above the latter will see the next barrier at 0.8920 (high of July 10).

Looking at the downside, 0.8770 acts as an initial support level for the pair, portraying the 50-hour EMA and a low of August 15. Further south, the next stop of the USD/CHF pair is located at 0.8755 (the 100-hour EMA, a low of August 11). Any intraday pullback below the latter would expose the next critical contention level at 0.8700. The mentioned level represents a low of August 4 and a psychological round figure. The next downside stop emerged at 0.8665 (low of July 31).