Bullish Resumption Follows Support Rejection and Hidden RSI Divergence

Central Bank

Economic

Summary:

The RSI dropped to 35, marking higher lows relative to price action and forming a hidden bullish divergence, which indicates that sellers are quickly losing momentum and buyers could regain control.

BUY USDCHF

EXP

TRADING

0.80519

Entry Price

0.82240

0.78900

0.80531 +0.00017 +0.02%

0.0

Pips

Flat

0.78900

Exit Price

0.80519

Entry Price

0.82240

The headline PCE Price Index rose 0.2% month-over-month in July, beating market expectations of 0.1% and reversing the 0.1% decline recorded in June. On an annual basis, headline inflation held steady at 3.7%, slightly above the anticipated 3.6% reading.

Meanwhile, the Core PCE Price Index—the Federal Reserve’s preferred gauge for assessing underlying inflation pressures—advanced 0.2% on the month, matching forecasts but accelerating from June's 0.1% increase. Year-over-year, core inflation remained at 3.3%, also aligning with market consensus.

Regarding economic activity, second-quarter 2026 Gross Domestic Product (GDP) came in line with estimates, while first-quarter growth was confirmed at 1.5%. On the other hand, durable goods orders increased by 1.1% month-over-month in July, more than doubling the 0.5% gain recorded in June and topping market forecasts, reflecting positive momentum in business investment.

On the monetary front, the inflation data did not materially alter expectations for the Federal Reserve. According to the CME FedWatch tool, markets currently price in roughly a 65% probability that the central bank will keep interest rates unchanged at its September policy meeting.

In the geopolitical arena, Iran and Oman have yet to reach a definitive agreement regarding maritime transit through the Strait of Hormuz, according to a senior Iranian source cited by Reuters. Tehran maintains that the United States must lift the naval blockade and that the broader conflict must end before normalizing traffic through this critical energy transit route.

U.S. President Donald Trump further noted to Al Jazeera that there is currently no set timetable to resume peace talks with Iran. Trump stated that both economic pressure and military actions are delivering the intended effect, maintaining uncertainty regarding the duration of the conflict and its potential impact on energy markets.

In Switzerland, July inflation delivered another downside surprise. The Consumer Price Index (CPI) fell 0.1% month-over-month, missing expectations for a flat reading. The main drag on price growth came from the transportation component, where prices dropped 0.4% on the month, contrasting with the 0.6% increase expected by consensus.

Looking at individual components, domestic prices rose 0.5% year-over-year, while imported goods prices held steady compared to the prior year. This trend reflects diminishing pressures from imported energy costs, which had previously driven inflation higher in preceding months amid geopolitical tensions in the Middle East.

The Swiss National Bank's (SNB) latest projection places average third-quarter inflation at 0.7% year-over-year. However, recent data points to a milder trajectory, with quarterly inflation tracking near 0.5%—roughly 0.2 percentage points below official forecasts. Declining fuel prices have been a key driver behind this deceleration, and should this trend hold, inflation could continue running below central bank estimates. Bullish Resumption Follows Support Rejection and Hidden RSI Divergence_1

Bullish Resumption Follows Support Rejection and Hidden RSI Divergence_1

Technical Analysis

USDCHF is moving within an upward trend that recently pulled back toward local support at 0.7976—an area where the 100-period moving average sits at 0.7978, while the 200-period average is positioned just below at 0.7932. This technical confluence and the resulting bullish rejection could attract renewed upward momentum toward the 0.8224 target, which aligns with the 0.618 Fibonacci expansion zone just above the recent local high.

Turning to the oscillators, additional technical signals support the structure. The RSI dropped to 35, marking higher lows relative to price action and forming a hidden bullish divergence, which indicates that sellers are quickly losing momentum and buyers could regain control. Meanwhile, the MACD presents a bearish histogram that has lost nearly all of its depth, while the signal lines hover just below the neutral mark; a bullish crossover in both the histogram and signal lines would add further weight to a bullish recovery.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8050

Target price: 0.8224

Stop loss: 0.7890

Validity: Sep 07, 2026 15:00:00

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Bullish Resumption Follows Support Rejection and Hidden RSI Divergence

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