Swiss Franc Gains Despite Positive U.S Data, Rate Cut Weigh

Fundamental Analysis

* Swiss Defiance: The Swiss Franc gained against the dollar despite better-than-expected U.S. economic data, as investors continued to focus on the possibility of a Federal Reserve rate cut. The Conference Board’s Consumer Confidence Index increased to 100.30 in July, up from a revised 97.8 in June, indicating a slight improvement in U.S. consumer sentiment. Additionally, the U.S. Bureau of Labor Statistics (BLS) reported 8.184 million job openings at the end of June, down from a revised 8.23 million in May but exceeding the market expectation of 8.03 million. Despite these figures, market reactions were subdued as attention remains on the potential for a Fed rate cut in September, with expectations that the Fed might start easing its policy soon as inflation approaches its 2% target.

Technical Analysis

* Technical Breakout: USDCHF was traded lower following prior retracement from its high. MACD which illustrate bearish momentum signal suggest the pair likely to extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards 0.87600. Conversely, a potential reversal is also to be expected and the price could head back towards 0.88900.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Moving ahead, markets are closely watching the Federal Reserve’s meeting on Wednesday, where a rate hold is expected given the strong US economic performance. However, investors anticipate that the Fed might signal the possibility of a rate cut in September. Currently, markets are pricing in an 80% chance of a rate cut, but upcoming labor market data this week will likely influence these expectations.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and global data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer

This content is for educational and informational purposes only and should not be considered investment advice, a personal recommendation, or an offer to buy or sell any financial instruments.

This material has been prepared without considering any individual investment objectives, financial situations. Any references to past performance of a financial instrument, index, or investment product are not indicative of future results.

PU Prime makes no representation as to the accuracy or completeness of this content and accepts no liability for any loss or damage arising from reliance on the information provided. Trading involves risk, and you should carefully consider your investment objectives and risk tolerance before making any trading decisions. Never invest more than you can afford to lose.