USD/CHF slipped to fresh weekly low around mid-0.96s post-US data

The USD/CHF pair lost 50 pips in a quick manner following the dismal retail sales and inflation report from the United States and fell to its lowest level since June 8 at 0.9651. As of writing, the pair was trading at 0.9657, losing 30 pips, or 0.32%, on the day.

A USD sell-off was triggered after the CPI in the U.S. eased to 1.9% in May from 2.2% in April on a yearly basis, casting a shadow over the expectations that the FOMC will announce a 25 basis points rate hike later in the session. However, despite the dismal data, the rate hike probability eased only a few points to 96% according to the CME Group FedWatch Tool. 

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The US Dollar Index fell to its lowest level since early November at 96.40 following the data and has been moving sideways around 96.50 in the last hour, losing 0.5% on the day. In the meantime, despite the weak data, the major equity indexes in the U.S. started the day higher, helping the pair find support.

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Technical outlook

0.9700 (20-DMA/psychological level) remains as the initial hurdle for the pair ahead of the 23.6% Fib. retracement of the latest downtrend seen on the daily graph (May 11 - Jun. 6) at 0.9730 and 0.9800 (Fib. 38.2%/psychological level). To the downside, supports align at 0.9610 (Jun. 6 low), 0.9550 (Nov. 9 low) and 0.9500 (psychological level).