USD/CHF mildly recovers post-US PPI data
After slipping to a session low at 0.9660, the USD/CHF pair recovered some of its losses following the PPI data from the United States. As of writing, the pair is trading at 0.9680, still down 0.08% on the day.
The price action of the pair seems to be driven by the greenback on Tuesday. Following a quick drop to 96.95 amid a lower than expected NFIB Business Optimism Index, the US Dollar Index rose back above the 97 handle as the Producer Price Index for final demand in the United States remained unchanged in May on a monthly basis, and came in at 2.4% on a yearly basis, beating the market consensus of 2.3%.
- US: Producer Price Index for final demand was unchanged in May
Despite some knee-jerk reactions to the data, the pair remains in a relatively tight 40-pip range on Tuesday as investors refrain from taking large positions ahead of tomorrow's FOMC meeting decisions and Chairwoman Yellen's speech.
- Fed: Market prices a 25bp rate hike - SocGen
- S&P's Bovino: Fed to raise interest rate 25 basis points this week – Reuters
Technical outlook
The pair could face the initial resistance at 0.9700 (20-DMA/psychological level), ahead of the 23.6% Fib. retracement of the latest downtrend seen on the daily graph (May 11 - Jun. 6) at 0.9730 and 0.9800 (Fib. 38.2%/psychological level). To the downside, supports could be seen at 0.9610 (Jun. 6 low), 0.9550 (Nov. 9 low) and 0.9500 (psychological level).
- USD/CHF could attempt a test of 0.9800 – Commerzbank