USD/CHF Price Analysis: Bulls fail to conquer the 200-day SMA, further downside on the horizon

The USD/CHF reversed its course after jumping to a daily high of 0.9032 and then settling slightly above 0.9000.
The USD is struggling to gather momentum on a positive market mood.
The US reported strong economic activity figures from September.
Rising US Treasury yields may limit the downside for the pair.

Patricio Martín FXStreet

In Tuesday’s session, the USD/CHF saw volatility, and after initially rising to a high above the 200-day Simple Moving Average (SMA) of 0.9032, it retreated towards 0.9000, still holding some daily gains. The market movers for the pair included US economic activity figures from September, while the Swiss economic calendar had nothing relevant to offer.

The US Census Bureau reported that Retail Sales came in at 0.7% MoM in September, higher than the 0.3% expected but decelerated from 0.8%. Furthermore, Industrial Production rose by 0.3% MoM in the same month versus the 0% expected, and both data points suggest that the US economy is resilient despite the Federal Reserve's (Fed) contractive monetary policy.

As a reaction, US yields continued rising, and the 2, 5, and 10-year rates rose to 5.22%, 4.88%, and 4.85%, respectively, with all three seeing more than 1.50% increases and approaching multi-week highs. In line with that, investors may be gearing up for another hike by the Federal Reserve as the combination of strong economic activity and inflation accelerating in September may justify one more 25 basis point (bps) increase in 2023. According to the CME FedWatch tool, the odds of a 25 bps hike in the December meeting rose to nearly 42%, while a pause in September is nearly to be priced in. For the rest of the week, the Federal Reserve’s Beige Book will provide further clues on Wednesday's US economic outlook and the weekly Jobless Claims report on Thursday.

USD/CHF Levels to watch

Observing the daily chart, the outlook is starting to tilt in favour of the bears, but they still have some work to do. The Relative Strength Index (RSI) has a negative slope below its midline, while the Moving Average Convergence (MACD) histogram presents bigger red bars. Additionally, the pair is below the 20 and 200-day Simple Moving Averages (SMAs) but above the 100-day SMA, indicating that the bulls still have some gas left in the tank in the broader picture.

Support levels: 0.8980, 0.8950, 0.8930.

Resistance levels: 0.9018 (200-day SMA), 0.9040, 0.9070.

USD/CHF Daily Chart

USD/CHF

Overview
Today last price	0.901
Today Daily Change	0.0009
Today Daily Change %	0.10
Today daily open	0.9001

Trends
Daily SMA20	0.9094
Daily SMA50	0.8945
Daily SMA100	0.8906
Daily SMA200	0.902

Levels
Previous Daily High	0.9042
Previous Daily Low	0.8996
Previous Weekly High	0.9124
Previous Weekly Low	0.8987
Previous Monthly High	0.9225
Previous Monthly Low	0.8795
Daily Fibonacci 38.2%	0.9014
Daily Fibonacci 61.8%	0.9025
Daily Pivot Point S1	0.8983
Daily Pivot Point S2	0.8966
Daily Pivot Point S3	0.8937
Daily Pivot Point R1	0.903
Daily Pivot Point R2	0.906
Daily Pivot Point R3	0.9077

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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