USD/CHF seems vulnerable near 0.8900 ahead of US Services PMI


  • USD/CHF is prone to more downside due to firm speculation that the Fed will start lowering rates in September.
  • The next move in the US Dollar will be guided by the US Services PMI data for May.
  • Fears of SNB’s stealth intervention in currency markets have strengthened the Swiss Franc.

The USD/CHF pair finds temporary support near 0.8900 in Wednesday’s Asian session. The outlook of the Swiss Franc asset appears to be vulnerable as the recovery move in the US Dollar (USD) seems stalling amid growing speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting.

Market sentiment is positive for risk-perceived assets due to firm Fed rate-cut hopes. S&P 500 futures have posted decent gains in the Asian session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, consolidates near an almost two-month low of around 104.00.

Traders raise bets in favor of the Fed lowering current interest rates from September as the US economic outlook appears to be losing strength. The perception is based on weak US ISM Manufacturing PMI report and downwardly revised Q1 Gross Domestic Product (GDP) data.

Going forward, investors shift focus to the US ADP Employment Change and the ISM Services PMI data for May, which will be published at 12:15 and 14:00 GMT. Economists have forecasted that private employers hired 173K job-seekers, lower than the prior reading of 192K. The Services PMI, which gauges the service sector activity that accounts for the two-third of the economy, is estimated to have returned to expansion. The economic data is seen at 50.5, higher than the former release of 49.4.

On the Swiss front, the Swiss Franc has strength amid expectations that the Swiss National Bank (SNB) could intervene in currency markets to support the Swiss Franc. Swiss exports have become more competitive in global markets due to weak currency, which could deepen fears of upside risks to inflation.

Meanwhile, the Swiss annual and monthly Consumer Price Index (CPI) grew steadily by 1.4% and 0.3% in May. Monthly inflation missed estimates of 0.4%.

USD/CHF

Overview
Today last price 0.891
Today Daily Change 0.0008
Today Daily Change % 0.09
Today daily open 0.8902
 
Trends
Daily SMA20 0.9075
Daily SMA50 0.9084
Daily SMA100 0.8932
Daily SMA200 0.8891
 
Levels
Previous Daily High 0.8973
Previous Daily Low 0.8884
Previous Weekly High 0.9154
Previous Weekly Low 0.9002
Previous Monthly High 0.9225
Previous Monthly Low 0.8988
Daily Fibonacci 38.2% 0.8918
Daily Fibonacci 61.8% 0.8939
Daily Pivot Point S1 0.8867
Daily Pivot Point S2 0.8832
Daily Pivot Point S3 0.8779
Daily Pivot Point R1 0.8955
Daily Pivot Point R2 0.9008
Daily Pivot Point R3 0.9044

 

 

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