USD/CHF is expected to prevail its downside movement. The pair accelerated on the downside after breaking below the rising trend line, which emerged on May 9. The downward momentum is further reinforced by the descending 20-period and 50-period moving averages. The relative strength index is bearish and calls for a further drop.
On the economic data front, CPI month-on-month increased 0.2% in April, an improvement from a decrease of 0.3% in the month of March. In addition, retail sales month-on-month rose 0.4% in April (expected 0.6%), up from an increase of 0.1% in the previous month. Finally, the University of Michigan Consumer Sentiment improved to 97.7 in May in a preliminary estimate, a slight increase from 97.0 in the month of April.
To conclude, as long as 1.0020 is not surpassed, look for a new drop to 0.9935 and even to 0.9900 in extension.
Resistance levels: 1.0040, 1.0060, and 1.0080
Support levels: 0.9935, 0.9900, and 0.9865
The material has been provided by InstaForex Company - www.instaforex.com
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