USD/CHF is currently struggling at the edge of 0.9700 area and seems to be correcting itself before an impulsive breakout. CHF has been quite stronger than USD earlier but currently seems to show some weakness along the way. Yesterday, Switzerland’s PPI report was published with an actual reading of -0.1% which previously was at -0.3% but could not meet the expectation at 0.0%. As a result, CHF was quite weak after the economic report was published. On the USD side, today CPI report is going to come in at 0.1% which previously was at -0.1%, Core CPI is expected to show an increase to 0.2% from the previous value of 0.1%, Core Retail Sales report is expected to show positive value at 0.2% which previously was at -0.3%, and Retail Sales report is also expected to show positive figure at 0.1% which previously was at -0.3%. Along with all these high impact economic events today, Capacity Utilization Rate report is also slated today with a slight improvement to 76.7% from previous value of 76.6%, Industrial Production report is expected to show a rise to 0.3% from the previous score of 0.0%, Prelim UoM Consumer Sentiment is expected to be unchanged at 95.1, Business Inventories report is expected to be positive at 0.3% from the previous negative value of -0.2%, and Prelim UoM Inflation Expectation is also expected to be upbeat as well which previously was at 2.6%. Today, FOMC Member Kaplan is also going to speak on the US key interest rate and future monetary policy. To sum up, a deluge of high and medium impact economic events today may lead to higher volatility in the market. Amid positve expectations for all these reports, USD is expected to gain stronger against CHF in the coming days.
Now let us look at the technical chart. The price is currently at the edge of 0.9700 resistance level which is expected to break above it as per hawkish sentiment and expectation of the USD economic events today. If the price breaks above 0.9700 with a daily close, then we will consider buy positions with a target at about 0.9810. On the other hand, if the price rejects 0.9700 with a daily close today, then we will plan sell positions with a target towards 0.9550 support level. As the trend is bearish, there are higher chances of price rejecting off the level. Then, the pair could proceed further with more bearish pressure in the market. The bearish bias will continue until price breaks above 1.0100 resistance level with a daily close.
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