USD/CHF challenges the 0.8800 area following the Swiss Retail Sales

• USD/CHF gains momentum near 0.8795 after the softer Swiss Retail Sales data.
• The pair holds below the 100-hour Exponential Moving Averages (EMAs) with a downward slope.
• The key resistance level emerges at the 0.8800-0.8805 region; the critical support level to watch is at 0.8760.

The USD/CHF pair gains traction around 0.8795 during the early European session on Thursday. The Swiss Franc is weakened against the US Dollar (USD) following the release of Swiss Real Retail Sales. Market participants will shift their attention to the US Core Personal Consumption Expenditure Price Index (PCE) and the weekly Jobless Claims due later in the North American session.

The latest data from the Swiss Federal Statistical Office showed on Thursday that the nation’s Real Retail Sales YoY for July came in at -2.2% from an increase of 1.8% on the previous reading.

According to the one-hour chart, USD/CHF holds below the key 100-hour Exponential Moving Averages (EMAs) with a downward slope, which means the path of least resistance for the pair is to the downside.

That said, the key resistance level for USD/CHF will emerge at the 0.8800-0.8805 region, representing a confluence of the upper boundary of the Bollinger Band, a psychological round figure, and the 100-hour EMA. The additional upside filter is located at 0.8818 (a low of August 28) en route to 0.8854 (a high of August 28) and finally at 0.8875 (a high of August 25).

On the downside, the critical support level to watch is at 0.8760, representing the lower limit of the Bollinger Band and a low of August 24. Further south, the next stop of the USD/CHF pair is located at 0.8700 (a psychological round mark) Any intraday pullback below the latter would expose the next downside stop at 0.8635 (a low of August 13) and 0.8690 (a low of August 10).

It’s worth noting that the Relative Strength Index (RSI) holds in bullish territory above 50, which supports the buyers for the time being.
 

USD/CHF one-hour chart