USD/CHF: the pair has broken the resistance level of 0.8625

Current trend

The USD/CHF pair is trading above 0.8625 amid the strengthening of the American dollar and poor Swiss macroeconomic statistics.

The September producer price index fell from 0.2% to –0.1%, below the forecast of 0.1%, and the consumer price indicator – from 1.1% to 0.8% YoY compared to preliminary estimates of 1.1%. As a result, the Swiss National Bank (SNB) may lean towards “dovish” rhetoric. On September 26, the regulator cut the interest rate by 25 basis points and may continue to adjust it in December, putting pressure on the franc.

The American dollar strengthens after the publication of inflation data last week. The September consumer price index rose by 0.2% MoM against estimates of 0.1% and the core indicator by 0.3%, exceeding forecasts of 0.2%. As a result, investors adjust their expectations regarding the US Fed interest rate cut cost by 25 basis points at the next meeting. Also, it may stay at the previous level, supporting the currency.

The long-term trend is upward. Last week, the trading instrument reached the resistance level of 0.8625 and is testing it today. After consolidation above, growth to 0.8745 and 0.8870 may follow. Otherwise, a decline to ​​0.8500 and 0.8405 (August-September low) is likely. The RSI indicator (14) is approaching the overbought zone but allows considering long positions along the trend.

The medium-term trend remains downward. Last week, as part of the correction, the price reached the key resistance area of ​​0.8634–0.8611. If a downward impulse forms near it, short positions with the targets at 0.8505 and 0.8376 are relevant. After consolidation above it, the trend will reverse upwards, and the quotes can reach zone 2 (0.8886–0.8861).

Support and resistance

Resistance levels: 0.8625, 0.8745, 0.8870.

Support levels: 0.8500, 0.8405, 0.8330.

Trading tips

Long positions may be opened above 0.8610, with the target at 0.8745 and stop loss 0.8550. Implementation period: 9–12 days.

Short positions may be opened below 0.8600, with the target at 0.8500 and stop loss 0.8645.