During the Asian session on Friday, USD/CHF shows a sideways movement near the 0.8480 mark and is preparing to end the week with a slight increase against the background of positive data from the American economy.
The updated estimate of US GDP for the second quarter showed an annual growth of 3%, which exceeded forecasts of 2.8%. These data may give the Fed some freedom in deciding on the monetary policy easing cycle, which is expected to begin in September. Despite the decrease in the probability of an interest rate change by 50 basis points, the market remains waiting for further steps by the Federal Reserve, whose actions directly depend on the readings of economic indicators. Last week, the number of initial applications for unemployment benefits in the United States fell to 231 thousand, which turned out to be better than forecast, but the number of repeat applications increased slightly to 1.868 million. On Friday, traders will keep an eye on the personal consumption expenditure index, which is an important indicator of inflation, and may have a significant impact on the Fed's decisions in September. A slight increase in the base rate is forecast in July from 2.6% to 2.7%.
Traders' attention will also be focused on the Swiss KOF index of leading indicators, which is expected to decrease to 100.6 p. Thomas Jordan, head of the Swiss National Bank, noted that the strengthening of the franc and weak consumer demand in the EU, especially in Germany, create difficulties for the Swiss economy. Jordan confirmed the need to keep inflation within 0-2%, which is a key factor for the recovery of the Swiss economy. If necessary, the Central Bank is considering the possibility of currency interventions, although interest rates remain the main instrument of monetary policy. At the next meeting of the NBSH on September 26, the markets expect a rate cut of 25 basis points with a 70% probability.
On the daily chart, the Bollinger Bands indicator remains in the downward direction while the MACD turns up. The stochastic oscillator shows an upward movement.
It is recommended to open long positions when the level of 0.8500 breaks up with a target of 0.8600. We set the stop loss at 0.8450.
We consider sales in the case of a rebound from 0.8500 down with a breakout of the pair below the 0.8450 level. The nearest target is at 0.8365. We will place the stop loss at 0.8500.