USD/CHF Price Analysis: Bull’s are running out of steam, correction on the horizon

• USD/CHF advanced towards 0.8930, seeing mild gains.
• Positive risk sentiment impacts the USD's weekly rally; still, the DXY index is poised to close a weekly gain of 0.60%.
• US yields slightly advanced and consolidated the weekly increase.

Despite FX markets being driven by a positive market mood and a declining US Dollar (USD), the USD/CHF continued to gain ground, but bulls are losing momentum. Still, the pair will close a 0.86% weekly gain, its highest since May.

For the rest of the session, the economic calendar will remain quiet, and investors await fresh catalysts to place their bets for the next Federal Reserve (Fed) decisions. Next week, the US will report Consumer Price Index (CPI) figures from August, which is expected to have accelerated. Retail Sales from the same month, expected to have decelerated, will also be watched.

Regarding the Federal Reserve (Fed) expectations, the CME FedWatch tool indicates that markets have already priced in a pause in the September 20 meeting, and the probabilities for the November and December meetings show that the odds of a 25 basis point (bps) hike wander around 40%. In that sense, as long as tightening expectations for the Fed remain high, the USD’s losses are limited.

USD/CHF Levels to watch 

 The daily chart highlights a neutral to bullish technical outlook for USD/CHF as signs of buying exhaustion become evident. With a flat slope above its midline, the Relative Strength Index (RSI) suggests that the pair may consolidate gains in the next sessions, while the Moving Average Convergence (MACD) histogram exhibits stagnant green bars.

 Support levels: 0.8900, 0.8877 (100-day SMA), 0.8850.

 Resistance levels: 0.8950, 0.9000, 0.9030.

USD/CHF Daily Chart