USDCHF sellers took the wind out of the consumers sails regardless of diverging inflation readings

USDCHF has trended lower despite diverging inflation data from Switzerland and the U.S.. Swiss CPI came in at -0.1% MoM and 0.4% YoY, while U.S. PPI surprised to the upside at 0.4% MoM and 3.5% YoY. Typically, stronger U.S. inflation data would support a higher USD/CHF, but price action has moved in the opposite direction, driven by technical factors.

The pair initially broke below its 100-hour moving average near 0.9113, along with a swing area between 0.9108 and 0.9115. After fluctuating around the 200-hour moving average (0.90896), another wave of selling pushed the price toward a support zone between 0.9058 and 0.9062, with the day’s low reaching 0.9064. Over the past several hours, USD/CHF has been consolidating in a narrow range between 0.9064 and 0.9084.

With the pair now trading below both the 100-hour and 200-hour moving averages, as well as under the 50% retracement level of the recent move up (0.9081), the bias remains bearish. A break below 0.9058 would strengthen the downside momentum, while a move above the 200-hour moving average is needed to shift bias back toward buyers.

Adding to USD weakness is the decline in U.S. yields, reversing yesterday’s rise. The 10-year yield is now down -8.2 bps, trading at 4.552%, further pressuring the dollar.