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Price Analysis: USD/CHF Gains Traction Near 0.8860; Focus on Fed's Powell
On Friday, USD/CHF acquires momentum for the second consecutive day above the 0.8850 level. The duo maintains an upward slope above the 50- and 100-hour Exponential Moving Averages (EMAs). The immediate resistance level will appear at 0.8875; the initial support level for the pair is 0.8838.
During Friday's Asian session, the USD/CHF pair extends its gains for the second consecutive day above the mid-0.8800s. In the meantime, the US Dollar Index (DXY) rises above 104.20, bolstered by higher US Treasury yields and a risk-averse market sentiment advance of the major event.
Patrick Harker, president of the Federal Reserve Bank of Philadelphia, stated at the Jackson Hole Symposium that the central bank has likely done enough with restrictive monetary policy. He added that he believes the Fed will maintain stable interest rates this year, but that next year's decision will depend on the available data. While Susan Collins, president of the Boston Fed, stated that additional rate increases are conceivable, it is premature to send a strong signal regarding the timing of rate cuts. Market participants anticipate fresh impetus from Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium on Friday. The USD could be strengthened and the USD/CHF pair could receive a boost if the officials make hawkish comments.
USD/CHF remains above the 50- and 100-hour Exponential Moving Averages (EMAs) with an upward trajectory, indicating that the path of least resistance for the pair is to the upside. Above 50, the Relative Strength Index (RSI) remains in favourable territory. Before positioning for any near-term USD/CHF appreciation, further consolidation cannot be ruled out due to the overbought condition.
The immediate resistance level for USD/CHF will emerge at 0.8875, which represents the intersection of the upper Bollinger Band boundary and the July 7 low. The additional ascending filter is located at 0.8915 (high of October 10) en route to 0.8950 (low of July 6) and 0.8970 (high of July 7) respectively.
In contrast, the 0.8838 midpoint of the Bollinger Band serves as an initial support level for the pair. The next level to the south for the USD/CHF pair is 0.8815 (the 50-hour exponential moving average). The area between 0.88 and 0.8805 represents a psychological round number, the 100-hour exponential moving average, and the lower limit of the Bollinger Band. Any intraday retracement below the latter level would expose the next downside stop at 0.8765 (August 22 low).
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