The US dollar is declining against the euro amid the weakening expectations that the Federal Reserve will increase the rate at the September meeting. The US producers’ prices index was expected to decrease in August by 0.1% compared with the previous month and will fall by 0.9% compared to last year August. The expectations concerning the producer prices and consumer confidence decline deepen the doubts that the Fed will raise interest rates in September.
The pair dollar/franc continues to trade in a narrow range. By the end of the week the pair rebounded downwards from the resistance level of 0.9750. We believe that is a correction.
The price is finding the first support at 0.9650, the next one is 0.9540. The price is finding the first resistance at 0.9750, the next one is 0.9850.
There is a confirmed and a strong buy signal. The price is above the Cloud and it is above the Chinkou Span. The Tenkan-sen and the Kijun-sen show a downward movement and form a “Dead Cross”. The upward movement will be until the price is above the Cloud.
The MACD indicator is in a neutral territory. The price is correcting.
Trading recommendations
We recommend going long with the first target - 0.9750. When the price consolidates above the first target it may go to the level 0.9850.