USD/CHF plummets following PCE data

USD/CHF took a downturn in Friday’s session, plummeting to 0.9016, after slightly rising to 0.9070 earlier in the session.
Following US inflation figures coming in line with market expectations, markets may be anticipating a less aggressive Fed stance.
The potential for rate cuts in September has increased slightly.

Patricio Martín FXStreet

The USD/CHF pair is trading lower following the release of the latest US inflation data on Friday. This change came in despite inflation figures, signaled by the Personal Consumption Expenditures (PCE) Price Index, holding steady at 2.7% YoY in April which matched market expectations.

On the other hand, the Core PCE Price Index, excluding volatile food and energy prices, observed a 2.8% YoY rise, consistent with the analyst's estimate. What seems to be weakening the USD is the lower-than-expected monthly variation of 0.2% which was below the 0.3% expected. The odds for easing by the Federal Reserve (Fed), however, remained mostly unchanged, except for a slight increase in the likelihood of the first-rate cut occurring in September. Those probabilities remain low for June and July.

USD/CHF technical analysis

In the daily analysis, the Relative Strength Index (RSI) has plunged into negative territory, indicating a momentum shift that favors sellers for the time being. Simultaneously, the Moving Average Convergence Divergence (MACD) displays red bars, pointing toward a growing bearish momentum.

USD/CHF daily chart

The USD/CHF seems to have lost some of its sheen from earlier in the week, when it stayed above the 20, 100, and 200-day Simple Moving Averages (SMAs). This previous positioning was a strong indicator of a bullish trend, with market dominance leaning towards buyers. However, following the recent downturn, the pair has lost its position above the 20-day SMA at 0.9095, indicating a less positive short-term outlook.

USD/CHF

Overview
Today last price	0.9023
Today Daily Change	-0.0011
Today Daily Change %	-0.12
Today daily open	0.9034

Trends
Daily SMA20	0.9091
Daily SMA50	0.9087
Daily SMA100	0.892
Daily SMA200	0.8889

Levels
Previous Daily High	0.9141
Previous Daily Low	0.9031
Previous Weekly High	0.9158
Previous Weekly Low	0.9079
Previous Monthly High	0.9195
Previous Monthly Low	0.8998
Daily Fibonacci 38.2%	0.9073
Daily Fibonacci 61.8%	0.9099
Daily Pivot Point S1	0.8996
Daily Pivot Point S2	0.8959
Daily Pivot Point S3	0.8886
Daily Pivot Point R1	0.9106
Daily Pivot Point R2	0.9179
Daily Pivot Point R3	0.9216

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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