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Swiss retail sales in May disappointed strongly coming in at -3.7% versus expectations of -1.4%, suggesting Swiss consumption is much softer than previously thought. This is the weakest number since a year ago when retail sales also fell before rebounding in the summer month. Today's data gave a reason for traders to ditch the Swiss franc, which continued to weaken against the dollar. The next leg higher could take the USD/CHF to around 0.94. This is consistent with our trade idea, in which we wrote about in yesterday's weekly forex ideas.

The Swiss franc is proving to be very strong in light of the rush to safety because of the macro uncertainty and overall bearish sentiment as many expect a recession to unfold in the US later this year. But what is remarkable is that the dollar has weakened meaningfully versus the Swiss franc, all while raising interest rates aggressively. And looking at the 2 year US Treasury, it suggests that investor sentiment has pulled down the dollar, perhaps asking now for some level of mean reversal, for the USDCHF to revert higher. 

The USDCHF currency pair looks increasingly interesting from a buyer's trading perspective. Yet, traders would do better to wait for a more attractive risk reward. RSI should first fall in oversold territory and show signs to set lows. And the support level of around 0.9020 should be closely monitored. Once the lows are set, the USDCHF could offer a strong rebound opportunity but are unlikely there quite yet.  

The dollar plummeted in light of falling rising interest rate expectations. The Swiss franc on the other hand surged lifted by exploding gold prices. Gold surged 2.3% on Monday to 1,910. The dollar looks oversold from a technical perspective and the USDCHF pair has support at just below 0.91.

The Swiss franc is on the move again! In fact, it has shown intense volatility lately. This Monday morning it is gaining strength versus the dollar after Swiss inflation data showed prices were pushing higher more than expected, which should pressure the Swiss National Bank to hike interest rates further. Note, the the SNB was ahead of the ECB last year in reactivity to hiking interest rates. CPI month on month came at 0.7% per year, versus 0.4% expected. Year over year it came at 3.4% versus 3.1%.