USD/CHF edged higher on Monday, trading around 0.8109 and up 0.38% on the day, as softer Swiss inflation data and a modest recovery in the US Dollar (USD) put pressure on the Swiss Franc (CHF) [1]. According to strategists at Brown Brothers Harriman, Swiss July Consumer Price Index (CPI) remained muted, with headline CPI at 0.4% year-over-year compared to 0.5% in June, while core CPI stayed at 0.3% year-over-year for the fourth consecutive month [1]. This lack of inflationary pressure gives the Swiss National Bank (SNB) room to keep rates at 0.00% for an extended period, which continues to drag on the CHF. The Franc is currently described as the worst performing G10 currency so far this quarter [1].
On the US side, the Greenback showed signs of stabilization after last week's sell-off, which was triggered by coordinated intervention from Washington and Tokyo to address excessive weakness in the Japanese Yen (JPY) [1]. Stronger-than-expected US ISM Manufacturing Purchasing Managers Index (PMI) data also supported the USD. The US Dollar Index (DXY) traded around 99.96, rebounding from an intraday low of 99.42, its weakest level since June 15 [1].
From a technical perspective, USD/CHF retested the 21-day Simple Moving Average (SMA) near 0.8110 after slipping below it last week. The pair remains above the 50-day and 100-day SMAs, maintaining a mildly constructive broader outlook. Momentum indicators are mixed, with the Relative Strength Index (RSI) near a neutral 52.5 and the MACD still in negative territory, suggesting steady rather than explosive upside in the near term [1]. Key resistance is at the psychological 0.8200 level, while immediate support lies at the 21-day SMA (0.8110), followed by the 50-day SMA (0.8038), horizontal support near 0.8000, and the 100-day SMA (0.7955) [1].
Strategists note that as long as USD/CHF holds above this layered demand zone, the pair is likely to maintain a mild bullish bias. A decisive break below 0.8000 would be needed to weaken the constructive tone and expose the pair to deeper retracements [1].
CONCLUSION
Muted Swiss inflation data and a stable US Dollar have pushed USD/CHF higher, with technical indicators pointing to a mildly bullish outlook as long as the pair remains above key support levels. The SNB's accommodative stance continues to weigh on the Franc, making it the weakest G10 currency this quarter. Market participants are watching for a decisive move above 0.8200 or below 0.8000 to signal the next directional bias.