Aayush Jindal
Key Highlights
- The US Dollar struggled to break the 0.9950resistance against the Swiss Franc.
- There are many important supports for USD/CHFnear 0.9860 and 0.9840.
- The US Wholesale Inventories increased 0.4% inMay 2019, similar to the forecast.
- The US CPI in June 2019 might rise 0.2% (MoM),more than the last +0.1%.
USDCHF Technical Analysis
After a successful close above 0.9750, the US Dollar climbed higher steadily against the Swiss Franc. The USD/CHF pair traded above many hurdles, but it recently struggled to clear the 0.9950 resistance.
Looking at the 4-hours chart, the pair settled nicely abovethe 0.9840 pivot level plus the 100 simple moving average (red, 4-hours). Duringthe recent rise, there was a break above a major bearish trend line withresistance at 0.9855.
The pair even broke the 0.9925 level and the 200 simplemoving average (green, 4-hours). However, it struggled to gain momentum above0.9950 and recently topped at 0.9951.
The pair corrected lower below 0.9925 and tested the 50% Fibretracement level of the upward move from the 0.9834 low to 0.9951 high. On thedownside, there are a few important supports near the 0.9875, 0.9860 and 0.9840levels.
Moreover, the 100 simple moving average (red, 4-hours) isalso near the 0.9850 level to act as a strong support. Therefore, as long asUSD/CHF is above the 0.9840 pivot level, it remains supported on dips and it islikely to bounce back.
Conversely, a successful close below 0.9840 and the 100 SMAmight start a significant downward move below the 0.9820 and 0.9800 supportlevels.
Fundamentally, the US Wholesale Inventories report for May2019 was released by the US Census Bureau. The market was looking for a 0.4%rise compared with the previous month.
The actual result was similar to the forecast, with a 0.4%rise in total inventories of merchant wholesalers, except manufacturers’ salesbranches and offices (similar to the last).
The report added:
May 2019 sales of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations and trading day differences but not for price changes, were $503.4 billion, up 0.1 percent (±0.4 percent) from the revised April level.
Overall, the US Dollar has likely started a downsidecorrection, but it could bounce back if the US CPI report meets the marketexpectation today.
Economic Releases to Watch Today
- German Consumer Price Index for June 2019 (YoY)– Forecast +1.3%, versus +1.3% previous.
- German Consumer Price Index for June 2019 (MoM)– Forecast +0.3%, versus +0.3% previous.
- ECB Monetary Policy Meeting Minutes.
- US Initial Jobless Claims - Forecast 223K,versus 221K previous.
- US Consumer Price Index June 2019 (MoM) –Forecast +0.2%, versus +0.1% previous.
- US Consumer Price Index June 2019 (YoY) –Forecast +1.6%, versus +1.8% previous.
- US Consumer Price Index Ex Food & Energy June2019 (YoY) – Forecast +2%, versus +2% previous.
