The USD/CHF pair experienced a minor increase on Monday, reaching 0.8895, as markets processed the news of US President Joe Biden’s withdrawal from the presidential race. This unexpected development has triggered a shift in risk appetite among investors, potentially limiting the upside for the pair. While Monday appears relatively calm, market participants are gearing up for a busy week filled with crucial US economic data releases.
The anticipated exit of Joe Biden from the presidential race has strengthened former President Donald Trump’s prospects, prompting investors to favor riskier assets. This, combined with expectations of a dovish Federal Reserve stance, could restrain the US Dollar’s upward momentum. Key economic indicators like Q2 GDP revisions and Personal Consumption Expenditures (PCE) are set to be unveiled this week, potentially adding volatility to the USD. Additionally, the S&P PMIs due on Wednesday will be closely monitored for further insights.
While markets currently anticipate a 90% probability of a rate cut in September, the upcoming economic data could influence these odds.
From a technical standpoint, the USD/CHF pair’s short-term outlook leans towards neutral to bearish. The pair is currently trading below the 20-day and 100-day Simple Moving Averages (SMA). Market attention is focused on whether buyers can successfully defend the 200-day SMA. Technical indicators are relatively flat but remain in negative territory.
Key support levels for the USD/CHF pair include 0.8880 (20-day SMA), 0.8850, and 0.8830. Conversely, resistance levels are observed at 0.8890, 0.8900, and 0.8930.
