Uncle Sam is ready to print the latest CPI report today!
Can USD/CHF resume its rally once the numbers are out?
As you can see from the hourly chart below, the pair has recently breached a short-term bearish trend line. This means that the tide is turning in favor of the dollar bulls, but a retest appears to be underway.
USD/CHF for one hour Planned by TV
The pair fell upon testing the key psychological resistance 0.9100, which happens to line up with R1 (.9110).
The price has since dropped to the 50% Fibonacci retracement level which coincides with the previous trend line and today’s pivot point (9040) to gather more bullish energy.
If this is enough to keep losses in check, USD/CHF could make its way back to the swing high or even R2 (.9180).
A stop loss below 61.8% Fibonacci level at 0.9028 might take you out of a long trade just in time before the pair sets its sights on the swing low around S1 (.8970).
Technical indicators look mixed at the moment, with the 100 SMA still below the 200 SMA while the stochastic is already pointing to oversold conditions.
However, the dollar may take cues from US CPI release for Maywhich is set to show another slowdown in inflation.
If the headline number drops from 4.9% to 4.1% y/y as number experts predict, we could see another round of US dollar losses on weak Fed rate hike hopes.
On the other hand, a strong reading may be enough to support hawkish hopes The decision of the Federal Open Market Committee in June the next day.
Keep in mind that the May Nonfarm Payrolls report once again beat estimates, giving the US central bank room to tighten if needed.
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