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.

Grab the trading opportunity and dive into the action risk-free with a free demo account. It is the perfect way to hone your skills and explore the exciting world of trading!

Open Your Free Demo Account And Start Trading Risk-Free

Join Now

Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.