USD/CHF slides towards 0.8900 on risk-off impulse, as traders eye US CPI data

• USD/CHF pair begins the week with minimal losses as risk aversion continues in the driver’s seat.
• US Wholesale inventories were unchanged in March, jumping 9.1% annually despite a first-quarter decline.
• Traders are eying the Fed’s Senior Loan Officer Survey alongside US inflation data.

The USD/CHF pair commenced the week with minimal losses of 0.15%, even though the latest round of inflation data in Switzerland suggested that the Swiss National Bank (SNB) could adopt a less hawkish approach. The latest United States (US) data flashed a solid labor market, though traders are eyeing inflationary data during the week. At the time of writing, the USD/CHF is trading at 0.8891, below its opening price by 0.15%.

US equities trend lower, reflecting a sour mood with investors seeking safety moved to the CHF

The USD/CHF is set to continue to slump during the day, as the US Dollar Index (DXY), a gauge of the buck’s value vs. a basket of six currencies, is down 0.02%, at 101.190. US equities trend lower as investors are eying the latest Senior Loan Officer Survey (SLOOS) revealed by the Fed amidst the ongoing US banking turmoil.

Although US bank equities have recovered some ground, Wall Street remains under stress, as sentiment took a hit, as the debt limit discussions in the US show no sign of improvement. The US Treasury Secretary, Janet Yellen, commented that there are no “good options” for solving the debt ceiling in Washington without the US Congress’s help.

Data-wise, the US economic agenda revealed that Wholesale Inventories were unchanged in March, below estimates of 0.1% MoM, the US Department of Commerce revealed. Annually based, inventories jumped 9.1% in March, despite the first quarter decline, as more robust US consumer spending contributed to the inventory rundown.

USD/CHF Technical Analysis

From a daily chart perspective, the USD/CHF is still downward biased, though trading above the year-to-date (YTD) lows of 0.8820. However, as price action continues to a downtrend, the Relative Strength Index (RSI) indicator registers higher troughs, meaning a positive divergence is surfacing. Therefore, that could open the door for further upside, but RSI needs to crack above the 50-midline. Downside risks in the USD/CHF lie at 0.8820, followed by 0.8800. Conversely, if USD/CHF reclaims 0.8900, further gains are warranted, though a downslope resistance trendline emerges at 0.8970, before climbing above 0.9000.