USD/CHF: stabilizes at 1.0020 in fourth day of consolidation

• The USD/CHF is stuck in the 1.0000-1.0050 range for the fourth consecutive day.
• After worse-than-expected NFP last Friday it is now the US core inflation which disappointed the market.
• The US Dollar Index is about to post its worst daily decline since mid-March. 
   

The USD/CHF is trading at around 1.0020 on Thursday as the pair is in its fourth day of consolidation. 

In the European session, the USD/CHF tested the 1.0050 level and then fell all the way back to parity on the back of worse-than-expected US core inflation. The USD bulls lifted the pair from the 1.0000 level to the 1.0040 and as the European session came to a close the pair fell back down again in the 1.0020 region. 

The US Dollar Index (DXY) is on the back foot as the US core inflation in April came at 2.1% versus the 2.2% expected by analysts. Last week on Friday the Non-Farm Payroll also came below expectations, adding further pressure to the USD. Traders’ expectations of four rate hikes in 2018 are starting to erode as investors are taking profits off the table from the multi-week USD long trade and the DXY is trading below the 93.00 mark, in the 92.60 region. Interestingly, the US Dollar Index is about to post its worst daily decline since mid-March. 

Meanwhile, the Swissy is at one-year’slow and in its fourth day of consolidation after a 900-pip run since mid-February. The market might need some USD positive catalysts to keep the uptrend from further losing momentum.

On Friday, Mario Draghi, the President of the ECB will be delivering a speech at 13:15 GMT and his outlook on the economy and monetary policy can affect EUR/USD and possibly USD/CHF by the same token. 

USD/CHF 4-hour chart

The trend is bullish and the pair is trading above its 50, 100 and 200-period simple moving averages on the 4-hour time frame, suggesting a strong upward momentum. Immediate support is seen at the parity level, 1.0000 and at 0.9950 psychological level. To the upside, bulls will likely meet resistance at the 1.0050 one-year high, if broken 1.0100 previous swing high should become the next scaling point to the upside.