Current trend

Against the stabilization of the American currency, the USD/CHF pair is corrected at 0.8848.

The franc came under pressure from poor macroeconomic statistics: the overall producer price index in February increased by 0.1% to 106.8 points, and oil, natural gas, and petroleum products rose in price the most. Compared to the same period a year earlier, the figure fell 2.0%, reflecting a rapid decline in demand for chemical products, as well as rubber, paper products, and metals.

The American dollar is holding around 103.30 in USDX after the publication of inflation data: in February, the producer price index increased from 0.3% to 0.6%, although analysts expected 0.3% and from 1.0% to 1.6% YoY compared to forecasts of 1.1%, raising doubts among investors about the imminent launch of a program to reduce interest rates by the US Federal Reserve. The main scenario assumes a first adjustment to borrowing costs of 25 basis points at the June meeting. However, statistics also confirmed the stability of the national labor market: initial jobless claims decreased from 210.0K to 209.0K, although analysts expected an increase to 218.0K, bringing the total claims to 1.811M, below the projected 1.900M.

In these conditions, a local increase in the USD/CHF pair its the most likely scenario. However, in the event of a downward trend in the dollar, a decline is not ruled out either.

Support and resistance

On the daily chart, the quotes move within a global range between first-order levels (I), and after reaching the crosshair between the second-order right resistance (II) and third-order left resistance (III) levels at 0.8842, the price is preparing to continue rising. The most likely scenario is a breakout of the crosshair and reaching the crosshair of the left first-order resistance (I) and the right third-order resistance (III) at 0.8910, after which an increase to the crosshair between the right first-order resistance (I) and the left third-order resistance (III) at 0.8979 is expected.

If the quotes could not break the crosshairs and reverse downwards, further dynamics will develop in a poor downward trend. The local crosshairs of the left support of the second order (II) and the right support of the second order (II) around 0.8790 will become a new target, and the crosshairs between the left support of the second order (II) and right support of the third order (III) at 0.8734 – a long-term target.

Resistance levels: 0.8910, 0.8979.

Support levels: 0.8790, 0.8743.

Trading tips

Long positions may be opened after the consolidation above 0.8910, with the target at 0.8979. Stop loss – 0.8880. Implementation period: 7 days or more.

Short positions may be opened after the consolidation below 0.8790, with the target at 0.8734. Stop loss – 0.8820.