Producer and Import Prices for June in Switzerland fell by 0.1% and by 6.1% against the previous year (forecasted -5.8%), which indicates a slowdown in inflation growth.
In the current state of fragile balance in the eurozone and sharp Asian stock markets moves, the Fed plans to increase interest rates can negatively affect investors sentiment and bring about uncertainty. Despite the USD is strengthening across the board, the CHF may become more attractive in the USD/CHF pair.
Thus, the USD strengthening against all major currencies, a possibility of Swiss NB interventions with the Frank selloffs, negative interest rates in Switzerland and anticipation of interest rate hike in the US give support to the pair.
Today, Retail Sales data for May is out in the US, due at 3:30 pm (GMT +3). On Wednesday and Thursday at 5 pm (GMT +3), the Fed Chair Janet Yellen is giving speeches. The releases may add to the volatility in pairs with the USD.
Support and resistance
The pair movement is going to happen within a narrow range between 0.9550 (May highs) and 0.9245, and a wider range between 0.9720 and 0.9100 (year lows). A middle line remains at 0.9430 (EMA200 and EMA144 on the daily chart).
Thus, a mid-term trading should be planned for within these ranges until the price breaks out in either direction.
The assumption is also supported by the technical indicators, as OsMA and Stochastic on both 4-hour and daily charts are yet in the positive zone but about to turn to form a sell signal.
Support levels: 0.9150, 0.9200, 0.9245, 0.9260, 0.9340.
Resistance levels: 0.9505, 0.9550.
Open short positions from0.9510, 0.9535, 0.9550 with targets at 0.9430, 0.9340, 0.9245 and stop-loss at 0.9575.
From the fundamental point of view, long positions look better. Once the price returns to 0.9340-0.9150 area and with the appropriate indicators signals, open long positions with targets at 0.9430, 0.9550, 0.9720, 1.0000, 1.0100.
In case of the breakdown below 0.9100, open short positions with targets at 0.9020, 0.8900, 0.8720.