USDCHF on Friday dropped -0.52% to 0.84700. Week ending 2024-08-23 moved lower by -2.37%. What you need to know.

USDCHF Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.52%	-44.5 Pips
Week 2024-08-23	-2.37%	-205.8 Pips
August	-3.55%	-311.4 Pips

Upcoming key events for the new week (London Time)

Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM GDP annual rate
Fri 01:30 PM PCE Price Index (excluding food and energy) (1-mth)
Fri 01:30 PM PCE Price Index (excluding food and energy) (12-mth)

What happened over the week

U.S. Federal Reserve Chair Jerome Powell, in a speech at the Jackson Hole Symposium, indicated the possibility of interest rate cuts in September. This statement comes amid signs of a cooling labor market and prevailing economic uncertainties. In related labor market news, the Department of Labor reported that the initial unemployment insurance claims for the week ending August 17 rose to 232,000, an increase from the previous week’s revised figure of 228,000. These data points suggest challenges in the labor market that may influence the Fed’s monetary policy decisions in the near term.

The recent economic developments in the United States have had a tangible impact on the USDCHF currency pair. On Friday, the USDCHF dropped by -0.52%, reaching a level of 0.84700. Over the course of the week ending August 23, the pair moved lower by -2.37%. Market participants are closely monitoring upcoming economic events, which include the initial unemployment insurance claims, the GDP annual rate, and the PCE price index data scheduled for release next week. These events are expected to carry medium to high impacts on the economic outlook and could further influence the USDCHF trading dynamics.

The indication of potential rate cuts by Jerome Powell and the rising unemployment claims are likely to exert downward pressure on the U.S. dollar. This could weaken the USDCHF pair further since lower interest rates typically diminish the appeal of the dollar to investors seeking higher yields. Conversely, if upcoming economic data reveal stronger-than-expected performance, it might alleviate some concerns, thus providing some support to the dollar. However, given the current trajectory and economic indications, the overall outlook suggests a continued bearish sentiment for the USDCHF pair in the short term.

From X (Twitter)

Production in Switzerland's secondary sector rose by 6.4% in 2nd quarter 2024 #statistics https://t.co/kJH0UEAx7J pic.twitter.com/T6AzfCZefv

— Swiss Statistics (@swissstatistics) August 16, 2024

What can we expect from USDCHF for the new week and what happened on Friday?

USDCHF on Friday dropped -0.52% to 0.85. Price is below 9-Day EMA while Stochastic is falling in oversold zone. For the week ending 2024-08-23, the pair dropped -2.37% or -205.8 pips lower.

Looking ahead, USDCHF looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook looks bearish, immediate support level is at 0.84 (WS1) with break below could see further selling pressure towards 0.84 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 0.86 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 0.85 would indicate selling pressure.

For the month of August, USDCHF is down by -3.55% or -311.4 pips lower.

Weekly key levels to watch out:

You might also be interested in:

Powell, Review and Outlook Source: Federal Reserve
Structural Business Statistics 2022 – Record employment growth in secondary sector Source: Federal Statistical Office
Quarterly Services Survey Source: Census Bureau
Minutes of the Federal Open Market Committee, July 30–31, 2024 Source: Federal Reserve