USD/CHF Price Forecast: Trades sideways around 0.8050 ahead of US PPI data

• USD/CHF oscillates around 0.8050 ahead of the USPI data for July.
• The US PPI report is expected to show that producer inflation grew at a faster pace.
• Investors expect the Fed to cut interest rates in the September meeting.

The USD/CHF pair consolidates in a tight range around 0.8050 during the European trading session on Thursday. The Swiss Franc pair wobbles ahead of the release of the United States (US) Producer Price Index (PPI) data for July, which will be published at 12:30 GMT.

Economists expect the US producer inflation to have grown at a faster pace on a monthly as well as an annual basis. Month-on-month headline and core PPI are estimated to have risen by 0.2%, after remaining flat in June.

Ahead of the US PPI data, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades with caution near the two-week low of around 97.60.

The US Dollar has been underperforming as cooling labor market conditions, and a nominal impact of tariffs on inflation have fuelled expectations supporting interest rate cuts by the Federal Reserve (Fed) for the September meeting.

In the Swiss region, price pressures undershooting the Swiss National Bank's (SNB) inflation target below 2% have increased hopes of interest rates falling into the negative territory.

USD/CHF trades in a limited range near the 20-day Exponential Moving Average (EMA) around 0.8054, indicating a sideways trend.

The 14-day Relative Strength Index (RSI) wobbles inside the 40.00-60.00 range, suggesting a sharp volatility contraction.

The pair could witness a fresh downside move towards the 0.7850 support level, and the round-level cushion of 0.7800, if it breaks below the July 1 low of 0.7872.

In an alternate scenario, a recovery move by the pair above the August 1 high of 0.8170 will open the room for more upside towards the June 19 high of 0.8215, followed by the June 6 high of 0.8248.

USD/CHF daily chart