USD/CHF reutrns to pre-data levels below mid-0.97s

After rising to a fresh session high at 0.9751 on the back of higher-than-expected retail sales data from the U.S., the USD/CHF retraced a portion of its gains and is now trading at 0.9730, still up 0.2% on the day.

In the early NA session, the U.S. Census Bureau announced that retail and food services sales for July increased 0.6% on a monthly basis, surpassing the market estimate of 0.4%. Moreover, June's data, which showed a contraction of 0.2%, was revised up to 0.3%. Boosted by the robust data, the US Dollar Index touched its highest level since July 26 at 94.04 before easing back a little. At the moment, the index was at 93.77, adding 0.45% on the day.

In the meantime, major equity indexes in the U.S. started the day higher but struggled to extend their gains, allowing the CHF to take back some of its losses against the buck. As of writing, both the Dow Jones Industrial Average and the S&P 500 indexes were virtually unchanged on the day.

Although there are no more data left in the remainder of the session, investors could refrain from adding to their long-USD positions before the FOMC releases its minutes from the July meeting, keeping the pair directionless until then.

• Fed: Markets not holding their breath for the next pick - MUFG

Technical outlook

The RSI indicator on the daily graph is moving sideways above the 50 mark, supporting the neutral short-term outlook with a slightly bullish bias. The pair could face the first technical support at 0.9655 (20-DMA) ahead of 0.9490 (Jul. 27 low) and 0.9400 (psychological level). On the upside, 0.9770 (Aug. 8 high), 0.9825 (May 18 high) and 0.9900 (psychological level).

Today's data from the U.S.

• US: Retail sales for July 2017 were $478.9 billion, an increase of 0.6% from June
• NY Fed: Business conditions index climbed fifteen points to 25.2, highest level in nearly 3 years
• US: Prices for US imports edged up 0.1% in July
• US: Manufacturers’ & trade inventories estimated at $1,869.3 bln, up 0.5% from May 2017
• US: Consumer demand started the third quarter on a strong footing - Wells Fargo