USD/CHF starts new trading week with mild gains

On Monday, the USD/CHF pair was able to begin the new week with mild gains, reaching 0.8895. The market sentiment was significantly influenced by political factors centered around the upcoming presidential turnover.

Investors are bracing themselves for a busy week due to a packed US economic calendar, which is expected to create volatility for the USD. Additionally, dovish bets on the Federal Reserve’s stance remain steady.

Presidential Race and Risk Appetite:

US President Joe Biden’s announcement of withdrawing from the presidential race caused a shift in risk appetites among investors. The favouring of former President Donald Trump led to a limitation in the upside potential for the USD/CHF pair.

Fed Expectations:

Anticipation of a dovish stance from the Federal Reserve further constrained the US Dollar’s gains. Investors are closely monitoring key economic indicators this week, including:

Gross Domestic Product (GDP) Q2 revisions
Personal Consumption Expenditures (PCE)
The release of S&P PMIs on Wednesday will also be closely watched.

Technical Factors:

The short-term technical outlook for USD/CHF is neutral to bearish. Currently, the pair is trading below both the 20-day and 100-day Simple Moving Averages (SMA). The critical focus lies on whether buyers will defend the 200-day SMA. Meanwhile, technical indicators remain relatively level but in negative territory.

Support Levels: 0.8880 (20-day SMA), 0.8850, 0.8830
Resistance Levels: 0.8890, 0.8900, 0.8930