Overnight, eyes were focused on Fed Chair Jerome Powell’s testimony to Congress

Round-up

Overnight, eyes were focused on Federal Reserve (Fed) Chair Jerome Powell’s testimony to Congress and it seems that the latest signs of softness in the US labour market has prompted some dovish change in tone from the Fed Chair. The Fed Chair acknowledged that the labour market appears to be fully back in balance and that the US economy is no longer an overheated economy, which is perceived to lay the groundwork for an impending rate cut.

The US dollar (+0.1%) firmed slightly, seemingly as market participants were hoping to hear more outright guidance for a rate cut in September. But with a key US inflation data release up ahead this week, the Fed Chair chose to retain some reservations which seem like a reasonable stance to take.

USD/CHF trading within near-term channel

A look at the USD/CHF revealed the pair trading within a near-term channel, with recent retest of the upper channel trendline finding some resistance. Buyers may have to see a move above a key resistance confluence at the 0.907 level to suggest greater control, which is where the channel resistance stands alongside its daily Ichimoku Cloud. For now, the downward bias may remain as its daily moving average convergence/divergence (MACD) falters around its zero-mark. Trading within the channel may call for a drift lower to the 0.883 level, where the lower channel trendline support stands.