USDCHF SLIDES AFTER WEAK SWISS CONSUMER INFLATION DATA

Global stocks were relatively mixed on Monday as investors reflected on the decision by Evergrande to suspend trading its shares in Hong Kong. After initially dropping, the FTSE 100, DAX, and CAC 40 indices rose by more than 0.10%. In the United States, futures linked to the Dow Jones and S&P 500 indices fell by more than 0.40%. According to Reuters, Evergrande halted trading its shares pending news that the company will sell its home services group. This sale will bring in about $5 billion for the company. Last week, the company sold a 20% stake in another Hong Kong traded bank.

The Swiss franc rose against the US dollar after the relatively weak economic numbers from Switzerland. According to the statistics agency, the country’s inflation declined from 0.2% in August to 0.0% in September. This drop was bigger than the median estimate of 0.2%. On a year-on-year basis, the CPI remained unchanged at 0.9%. The country’s inflation is substantially lower than that of other countries like the United States and the UK. Meanwhile, retail sales rose by just 0.5% in August.

The price of crude oil held steady as investors waited for a decision by OPEC+ members. The members, including Russia, are holding a meeting to deliberate on future production. Analysts expect the cartel to agree to keep the pace of supply increases at about 400k per month until mid-2022. A decision to maintain this supply will go against what Joe Biden wants. In a statement, the American president has pressed the cartel to boost production in a bid to lower prices. Meanwhile, in a statement, the head of Pioneer Natural Resources said that US producers will not be able to boost production.

USDCHF

The USDCHF pair declined sharply after the latest Swiss inflation data. The pair dropped to 0.9282, which was the lowest level since September 26. On the four-hour chart, the pair has dropped below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved from the overbought level. Therefore, the pair will likely keep falling as bears target the next key support level at 0.9250.

EURUSD

The EURUSD pair had a relief rally after dropping substantially last week. It moved to a high of 1.1610, which was slightly above last week’s low of 1.1563. On the four-hour chart, the pair is attempting to retest the key resistance at 1.1663. The MACD indicator has formed a bullish crossover pattern while the DeMarker has risen to the overbought level. Therefore, the pair will likely keep rising during the American session. It will then retreat later this week as the relief rally fades.

USDJPY

The USDJPY pair rose to a high of 111.27 after Japan’s new prime minister took office. This price was substantially higher than last week’s low of 110.79. This level was notable support since it was the highest point in August. On the four-hour chart, the pair is being supported by the 25-day moving average while the DeMarker has started moving from the oversold level. Therefore, the pair will likely resume the bullish trend as bulls target the key resistance at 112.