USD/CHF falls to multi-month lows around 0.9230s on soft US CPI

• US CPI climbs toward 7.1% YoY, while core inflation drops to the 6% threshold.
• USD/CHF: A daily close below 0.9300 to pave the way towards 0.9150.
• Investors focus shifted toward the Federal Reserve monetary policy on Wednesday.

The USD/CHF stumbles and refreshes eight-month lows, around 0.9231, after hitting a daily high of 0.9375, following the release of US inflation figures, which eased a bit, taking pressure off the Federal Reserve (Fed), which would meet on Wednesday, for the last time in the year. At the time of writing, the USD/CHF is trading at 0.9280, below its opening price, by 0.85%.

US inflation eases, a headwind for the USD/CHF

Wall Street remains trading with gains while the US Dollar (USD) sinks. On Tuesday, the US Department of Labor revealed the Consumer Price Index (CPI) for November, which decreased year-over-year by 7.1%, below analysts' predictions of 7.3%. In addition, core CPI shifted upwards during September and then moved back down again - standing at 6% lower than initial projections of 6.3% for November figures.

The US Dollar Index, a gauge of the buck’s value against a basket of six currencies, is dropping 0.99%, at 103.961, after hitting a low of 103.586, undermined by falling US Treasury yields. In the fixed income space, the US 10-year T-bond yield is falling twelve bps, at 3.485%, as traders began to price in a less aggressive Federal Reserve.

On the Switzerland side, the Seco economic forecasts confirmed that the Swiss economy is estimated to grow significantly below-average rate of 1.0% in 2023, followed by 1.6% in 2024 GDP. It should be said that the projections assume no energy supply shortages in 2022 and 2023 next winter.

USD/CHF Price Analysis: Technical outlook

The USD/CHF broke to the downside, the falling wedge, though a daily close below 0.9300 would be needed, to further cement the downward bias, confirmed by oscillators. The Relative Strength Index (RSI), at bearish territory, points downward. In the case of the Rate of Change (RoC), it keeps pressuring to the downside, portraying that sellers are gathering momentum.

Hence, the USD/CHF key support levels are the 0.9200 figure, followed by the March 22 daily low at 0.9194, ahead of the February 21 daily low at 0.9150.