The USDCHF was met with aggressive supply on Friday as the pair fell 0.75 per cent for day, reversing gains from the two previous sessions. The pair failed to capitalise on its bullish momentum as strong selling currents in the greenback against its major rivals JPY and EUR weighed on the USDCHF at the end of the week.

Despite the US being the leading country in terms of covid-19 cases, the country’s economic data continues to point upwards. The US Census Bureau announced a 5.6 per cent increase in the retail sales control group for June versus expectations of 3.6, indicating personal consumption is on the rise and the recent fiscal stimulus boosted consumption more than anticipated.

The US Dollar looks set to remain under pressure as long as global economic data continues to deliver upbeat results. The Dollar Index (DXY) is nearing its two-month low of 95.72, currently hovering around 96. Talks of further monetary stimulus by the US Federal Reserve will likely support riskier assets in the short run and further weigh on the greenback.

From a technical perspective, the USDCHF remains on track to push lower as momentum continues to favour the bears. The next downside target will be the 0.93622 support level and in extension, the 0.93208 mark. Buyers will likely resurface around the 0.933 mark, as the RSI may signal oversold conditions at that point.

Traders may look to short the USDCHF at current levels to ride the bearish action into the start of next week. Pullbacks below 0.933 may be bought. However, without any further indication on the direction of the Swiss National Bank’s monetary policy, traders may be at the mercy of a kneejerk reaction by the central bank sending the USDCHF higher should it deem the CHF too strong.

Support and Resistance Levels:

R3 0.95080
R2 0.94686
R1 0.94219
P 0.94000
S1 0.93622
S2 0.93208
S3 0.92525

Analyzed by: Mr. Thibault Moirez, Independent Analyst