Today’s free forex signals service is a buy on the USD/CHF pair as we expect uplift going into the US inflation data release due later today.
The USD/CHF stays higher and it seems poised to resume its upwards movement. The price has slipped a little lower primarily because the Dollar Index (DXY) has dropped. Technically, it could retest the immediate support levels before jumping higher.
The pair is trading in the red at the moment of writing, as the Switzerland PPI registered unexpected growth. The indicator rose by 0.7% versus 0.2% expected and versus 0.5% growth in the previous reporting period.
Still, the current decline may be only a temporary one.
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Dollar set to strengthen if US seen importing inflation
The US inflation data will drive the pair later today. The CPI is expected to rise by 0.4% in August versus a 0.5% growth in July, while the Core CPI may register a 0.3% growth.
Higher-than-expected figures could boost the value USD as the traders could expect the Federal Reserve to hike rates.
The Fed is watching the consumer prices index for any signs that inflation that will be anything other than transitory. The Fed has stuck with the “transient” mantra in the face of growing evidence that the general rise in prices could have greater longevity.
As a result of the severe hit to output due to the pandemic, the recovery has been particularly strong because of the pent-up demand, putting pressure on supply. However, severe supply bottlenecks have now emerged, both in terms of production capacity and the functioning of the global supply chain at a logistical level.
Energy prices and food are areas of particular concern globally as well as the impact of the Delta variant in Asia where a lot of manufacturing production takes place. The extent to which the US is importing inflation may become more apparent in the inflation data.
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Free forex signals – buy USD/CHF at 0.9250
Technically, the 0.9242 level is seen as a critical resistance. Making a valid breakout through it could activate an upside continuation.
Instrument: USD/CHF
Order Type: BUY STOP
Entry price: 0.9250
Stop Loss: 0.9197
TP1: 0.9339
Our Risk Setting: 1%
Risk / Reward Ratio: 1:1.7
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