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USD/CHF slumps to fresh session lows on USD sell-off

After testing the 0.97 handle in the European session, the USD/CHF fell sharply in the early NA session as the disappointing data from the U.S. triggered a USD sell-off. As of writing, the pair, which dropped to 0.9630 on the initial market reaction, is trading at 0.9645, losing 0.3% on the day.


Today's data from the U.S. showed that the Consumer Price Index remained unchanged on a monthly basis in June after contracting 0.1% in May, missing the market consensus of 0.1% expansion. Furthermore, the CPI on a yearly basis fell to 1.6% from 1.9%. As the weakening inflation is seen as a factor that could keep the Fed on the dovish side, the greenback started to lose strength, with the US Dollar Index slumping to its worst level since September 22, 2016, at 94.97. At the moment, the index is at 95.03, down 0.55% on Friday.


  • US Dollar in fresh YTD lows near 95.00 on poor CPI

Other data revealed that retail sales eased to $473.5 billion in June, contracting by 0.2% on a monthly basis and increased the selling pressure on the greenback.


  • US: Consumer Price Index was unchanged in June on a seasonally adjusted basis
  • US: Retail and food services sales for June 2017 were $473.5 billion, a decrease of 0.2%

On the other hand, today's positive earning reports from big financial firms in the U.S. helped the major equity indexes start the day higher despite the weak data, limiting the gains seen in safe haven assets like the CHF. Both the Dow Jones Industrial Average and the S&P 500 indexes are up 0.15% in the first half of the session.


  • US stocks inch higher, all set to end the week with strong gains

Technical outlook


With this latest drop, the RSI indicator on the daily graph started to move towards the 30 mark, suggesting that the bearish momentum is building up. On the downside, short-term supports could be seen at 0.9600 (psychological level), 0.9550 (Jun. 29 low) and 0.9500 (psychological level). On the upside, resistances align at 0.9700 (psychological level), 0.9735 (Jun. 26 high) and 0.9800 (May 30 high).

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