Current trend

During morning trading, the US dollar is holding near 0.8730. Market activity remains quite low, as market participants are in no hurry to open new positions in anticipation of key macroeconomic statistics from the US at the end of the week.

Inflation data is to be released on Thursday: current forecasts suggest that year-on-year consumer price growth could pick up from 3.0% to 3.3%, while maintaining its monthly rate of 0.2%, while the Core CPI is likely to adjust from 4.8% to 4.7% year on year. If this scenario materializes, analysts may revise preliminary estimates regarding further tightening of monetary policy by the US Federal Reserve. Now investors are confident that the monetary authorities will take a wait-and-see attitude, having paused in tightening incentives. On Friday, traders will pay attention to the publication of statistics on producer inflation: according to forecasts, on an annualized basis, the figure will increase from 0.1% to 0.7%, while the core value, on the contrary, will be adjusted from 2.4% to 2.3%.

The day before, the July Unemployment Rate was published in Switzerland, which, as expected, remained at the same level of 1.9% on a monthly basis. The franc was also slightly pressured by the fall in foreign currency reserves in July from 725.0 billion francs to 698.0 billion francs.

Support and resistance

On the daily chart, Bollinger Bands are reversing into a horizontal plane. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, on the contrary, signals in favor of the development of "bearish" dynamics in the near future.

Resistance levels: 0.8756, 0.8800, 0.8850, 0.8875.

Support levels: 0.8700, 0.8650, 0.8600, 0.8553.

Trading tips

Short positions may be opened after a breakdown of 0.8700 with the target at 0.8600. Stop-loss — 0.8750. Implementation time: 2-3 days.

The return of the "bullish" trend with the breakout of 0.8756 may become a signal to open long positions with the target at 0.8850. Stop-loss — 0.8700.