USD/CHF analysis from August 1, 2024
In Thursday's Asian session, USD/CHF is testing the 0.8760 level for a downward breakdown, updating the lows from March 12.
Pressure on the pair is exerted by yesterday's decision of the US Federal Reserve to leave the rate at 5.5%. The Fed said that in order to change the course of monetary policy, additional evidence of a decrease in inflation to the target level of 2.0% is needed. Experts expect that in September the cost of borrowing will decrease by 25 basis points.
In addition, the US labor market statistics from ADP were released the day before. According to the report, employment decreased from 155.0 thousand to 122.0 thousand in June, which is worse than the forecast of 150.0 thousand, the report put pressure on the dollar.
Swiss economic statistics did not support the franc. The ZEW economic expectations index fell from 17.5 points to 9.4 points in July, which is worse than analysts' forecasts and the May value of 18.2 points. At the end of the week, investors are expecting data on July inflation, which may affect the policy of the Swiss National Bank. The consumer price index is expected to remain at 1.3% year-on-year and decrease from 0.0% to -0.2% month-on-month.
In the USA, a report on the labor market - Non-farm Payrolls will be published tomorrow..It is expected that in July the number of new jobs outside the agricultural sector will decrease from 206.0 thousand to 175.0 thousand, and the average hourly wage will decrease from 3.9% to 3.7%.
On the daily chart, the Bollinger Band indicator is steadily decreasing. The MACD indicator keeps a sell signal. The stochastic oscillator is near the 20 mark
Short positions can be opened after breaking down the 0.8750 level. The target will be the key level of 0.8700. We will place the stop loss at 0.8776.
Purchases are advisable after a rebound from the 0.8750 level and an upward breakdown of the 0.8776 level. The nearest target is 0.8839. We put the stop loss at 0.8730.