Failure to Make Lower Lows Signals Downward Correction Could Be Over

Forex

Economic

Summary:

The MACD shows a bullish histogram that could begin gaining depth, while the signal lines are close to crossing above the neutral line, suggesting that the path of least resistance points upward.

BUY USDCHF

EXP

PENDING

0.80600

Entry Price

0.82080

0.80100

0.80954 -0.00052 -0.06%

Pips

PENDING

0.80100

Exit Price

0.80600

Entry Price

0.82080

On the geopolitical front, Iran ruled out any future negotiations with U.S. President Donald Trump, according to Iranian media reports and statements released by Parliamentary advisors. Based on these accounts, Tehran does not contemplate resuming talks with Washington until after the conclusion of the current U.S. presidential term in January 2029.

Escalating Middle East tensions continue to propel energy markets higher. The yield on the U.S. 10-year Treasury note advanced roughly six basis points to 4.705%, while West Texas Intermediate (WTI) posted a sharp gain of over 6.7%, reaching $82.29 per barrel.

In the United States, investor attention turns to the upcoming release of July's Consumer Price Index (CPI). Headline inflation is expected to moderate slightly to 3.4% year-over-year from 3.5% prior, while core inflation, which excludes more volatile components, is also projected lower to 2.5% from 2.6%. Additionally, markets will closely monitor the Producer Price Index (PPI) publication scheduled for the following day.

Recent labor indicators continue pointing toward a gradual slowdown in the job market. Initial jobless claims dropped to 199,000, slightly outperforming market expectations, while Challenger job cuts eased to 33,400 from the 45,800 recorded previously. Taken together, these figures suggest a moderation driven primarily by slower hiring rather than a significant increase in layoffs.

This trend was also reflected in the ADP report, which showed the creation of 44,000 private sector jobs during July, coming in below both forecasts and the previous month's reading. Similarly, JOLTS job openings landed below expectations, keeping investor focus fixed on the upcoming Non-Farm Payrolls (NFP) report.

In Switzerland, inflation surprised to the downside during July. The Consumer Price Index (CPI) recorded a monthly decline of 0.1%, falling below market expectations that anticipated an unchanged reading. The main drag on inflation came from the transport component, where prices dropped 0.4% month-over-month, in contrast to the expected 0.6% increase.

At the component level, domestic prices increased 0.5% year-over-year, while imported goods prices stayed stable relative to the previous year. This movement points to easing pressures associated with imported energy costs, which had contributed to the inflation pickup observed in prior months following Middle East tensions.

The Swiss National Bank's (SNB) latest forecast places average third-quarter inflation at 0.7% year-over-year. However, recent figures suggest a milder trajectory, with quarterly inflation tracking near 0.5%—roughly 0.2 percentage points below official estimates. Falling fuel prices have served as a key factor behind this deceleration, and if this trend persists, inflation could continue tracking below central bank projections. Failure to Make Lower Lows Signals Downward Correction Could Be Over_1

Failure to Make Lower Lows Signals Downward Correction Could Be Over_1

Technical Analysis

USDCHF has been moving in a consolidation pattern that has failed to print a lower low beneath the level touched on July 30. Instead, it found support slightly higher around the 0.8055 mark and appears poised to reclaim the 100 and 200-period moving averages located at 0.8119 and 0.8098, respectively. A close above these levels could push price back toward the 0.8208 resistance level hit on July 29; a solid breakout above this boundary could allow price to advance further.

Looking at the oscillators, the RSI reached the 27 mark on July 30 and has since been unable to break down to lower levels, currently sitting at 52—just above neutral ground—which leaves ample room to keep building gains. Meanwhile, the MACD shows a bullish histogram that could begin gaining depth, while the signal lines are close to crossing above the neutral line, suggesting that the path of least resistance points upward.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8060

Target price: 0.8208

Stop loss: 0.8010

Validity: Aug 21, 2026 15:00:00

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Failure to Make Lower Lows Signals Downward Correction Could Be Over

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