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  • The USD/CHF is trading with a bearish bias at 0.9185 level as weaker US inflation figures are in play during the US session.
  • Bureau of Labor Statistics reported a worse than expected consumer price index for the US. The Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.3 percentage points.
  • Forex trading participants may look for a sell trade below the $0.9180 level to reach the target of $0.9115.

The USD/CHF currency pair failed to extend its previous-day bullish bias and turned sour on the day as the broad-based US dollar bearish attitude put some pressure on the major. The US dollar was being pressured by the market’s risk-on mood, which tends to undermine safe-haven assets like the dollar. The USD/CHF is trading with a bearish bias at the 0.9185 level as weaker US inflation figures are in play during the US session.

 

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After the US consumer inflation figures, the cautious sentiment has also put some downside pressure on the USD/CHF currency pair. Alternatively, the prevalent risk-on market mood undermined demand for the safe-haven Swiss franc. This was seen as one of the key factors that kept the lid on any additional losses in the USD/CHF currency pair. 

The USD/CHF currency pair is trading at 0.9186 and consolidating in the range between 0.9180 – 0.9245 level. The USD/CHF currency pair rose and reached a new daily high, breaking through the 0.9200 round-figure mark on Tuesday. The combination of supporting factors helped the USD/CHF currency pair to gain strong positive traction yesterday. However, the gains were short-lived as continued US dollar selling pressure put additional pressure on the major for the second consecutive session. 

Greenback Weights Have a Bearish Bias on USD/CHF

The US dollar dropped below a 2-1/2-week high as investors priced in worse than expected inflation data. It might offer clues on the timing of policy tightening by the Federal Reserve at a meeting next week.

Furthermore, the upbeat market sentiment exerted some extra downside pressure on the dollar. Therefore, the broad-based US dollar weakness extended some pressure to the USD/CHF currency pair.

Risk-on Sentiment Limits Demand for Swiss Franc as a Safe-haven Currency

On the other hand, as reflected by a generally upbeat market in the equity markets, the market risk-on environment undermined demand for the safe-haven Swiss franc. This was seen as one of the critical factors that would cap further losses in the pair. The market’s trading sentiment maintained its overnight positive moves during Tuesday. Furthermore, it remained well bid as the market remained bid due to optimism about faster vaccinations.

In the meantime, Iran’s readiness to surrender investigation rights at the nuclear facility positively impacted the market trading sentiment.

The US inflation figure disappoints.

The Bureau of Labor Statistics reported a worse than expected consumer price index for the US. The seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in August, following a 0.5 percent increase in July. Before seasonal adjustment, the all-items index increased by 5.3 percent in the previous year.

The gasoline, domestic furnishings and operations, food, and housing indexes increased in August. It contributed to the monthly seasonally adjusted increase in all goods. Moreover, the energy index rose 2.0 percent, owing primarily to a 2.8 percent rise in the gasoline index. The food index increased by 0.4 percent, with both the food at home and food away from home indices rising by 0.4 percent.

Stronger NFIB Small Business Index Underpins Greenback

During the European session, the NFIB released the NFIB Small Business Index data. In August, the NFIB Small Business Optimism Index improved 0.4 points to 100.1. Five of the ten Index components increased in value, four decreased in value, and one remained stable. The NFIB Uncertainty Index fell seven points to 69 in January 2016, the lowest level since January 2016.

Weaker US Inflation Figures in Play
USD/CHF 4-Hour Chart

USD/CHF Price Forecast – Technical Levels

Support Resistance

S3 0.9124

S2 0.9161

S1 0.9175

Pivot Point 0.9197

R1 0.9211

R2 0.9234

R3 0.927

USD/CHF Struggles Below Double Top at $0.9243 – US Inflation Figures in Play

The USD/CHF price prediction stays bearish below an immediate resistance level of $0.9240. On the 4-hour timeframe, the USD/CHF pair has violated the symmetrical triangle pattern at the $0.8170 level. As a result, the pair is exposed towards the double top resistance level of $0.9240.

On the bullish side, the breakout of the 0.9240 resistance level exposes the pair towards the 0.9270 level. At the same time, the 50-day EMA (exponential moving average) will provide immediate resistance at the 0.9200 level.

On the bearish side, the pair has the potential to go after the 0.9150 level. An additional breakout of the 0.9150 mark could lead the pair towards the 0.9115 level that’s being extended by a triple bottom pattern.

Lastly, the leading technical tool, Stochastic RSI, is holding in a buying zone; however, it’s heading lower towards the sell zone. Thus, forex trading participants may look for a sell trade below the $0.9180 level to reach the target of $0.9115. All the best.

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