USD/CHF finds resistance at 0.9000 and pulls back

• The USD/CHF declined to 0.8990, with mild downwards movements.
• The USD is extending its gains due to a cautious market outlook.
• Jerome Powell was on the wires on Wednesday and provided no highlights.

The USD/CHF experienced a quiet session on Wednesday near the 0.8990 area, seeing slight losses, with the trajectory of the pair being set by the US Dollar strengthening further. No high-tier reports were released, and the following highlights will be Consumer Confidence data from the US on Friday and next week's inflation data.

In that sense, after sharply declining last week, the US DXY index, which measures the value of the USD against a basket of currencies, rose to 105.60, up by 0.20% as markets turned cautious, awaiting fresh catalyst on a quiet week.

On Tuesday, several Federal Reserve (Fed) officials were on the wires and didn’t provide any relevant insights regarding the bank's overall stance. Overall, they welcomed the latest data from the labor market, which saw evidence of cooling down, but they hinted at needing further evidence to say that the job is done. On Wednesday, Chair Powell was seen at the US Central Bank statistics conference and refrained from commenting on the monetary policy.

For next week, markets are seeing the US Consumer Price Index (CPI)  to have advanced 0.1% MoM in October while the Core measures 0.3%. In addition, the outcome of the inflation reading may shape the expectations for the next Fed meeting, which, as for now, markets are betting on low odds of a hike.

USD/CHF Level to watch

The technical analysis of the daily chart points to a neutral to bearish outlook for USD/CHF, indicating a decline in bullish strength. The Relative Strength Index (RSI) points downwards in the bullish territory, suggesting a possible trend reversal, while the Moving Average Convergence (MACD) lays out red bars. In addition, the pair is above the 100-day Simple Moving Average (SMA) but below the 20 and 200-day SMAs, suggesting that despite the recent bearish sentiment, the bulls are still resilient, holding some momentum. However, if the 20- and 200-day averages complete a bearish cross around the 0.9000 area, further downside may be on the horizon for the pair.

Supports: 0.8960, 0.8950, 0.89300
Resistances: 0.9000 (20 and 200-day SMA convergence), 0.9030, 0.9050

USD/CHF Daily chart