CFD Trading Rate US Dollar vs Swiss Franc (USDCHF)

• USD/CHF encounters challenges amid renewed expectations for rate cuts by the Fed in 2024.
• Fed is anticipated to execute its initial rate cut in September, against the earlier forecasts in November.
• SNB Chairman Thomas Jordan may offer fresh cues on policy stance during the BIS Innovation Summit 2024.

USD/CHF continues its losing streak for the fourth successive day on Monday, trading around 0.9050 during the European hours. The weaker US Dollar (USD) puts pressure on the USD/CHF pair, which could be attributed to the revived expectations for potential interest rate cuts by the US Federal Reserve (Fed) later this year. This sentiment is derived from the softer-than-expected US jobs data released on Friday.

On Friday, US Nonfarm Payrolls data showed that the United States (US) economy added 175,000 new jobs in April, falling short of the estimated 243,000 and indicating a notable deceleration from March's addition of 315,000 jobs. Additionally, Average Hourly Earnings (YoY) rose by 3.9% in April, slightly below the anticipated 4.0% and the 4.1% prior. Meanwhile, monthly growth stood at 0.2%, compared to the expected 0.3%.

The Federal Reserve (Fed) is expected to implement its first rate cut in September, diverging from previous forecasts indicating November. According to the CME FedWatch Tool, the probability of a 25 basis points (bps) rate reduction by the Fed during September's meeting has increased to 48.8%, up from 43.8% just a week ago.

On the Swiss side, data released on Thursday showed that annual inflation in Switzerland accelerated more rapidly than expected in April. The Swiss Consumer Price Index (CPI) inflation rose to 1.4% year-on-year in April from a previous increase of 1.0% in March, surpassing the market consensus of 1.1%. This unexpected acceleration has lent support to the Swiss Franc (CHF).

Looking ahead to Monday, traders are anticipated to closely monitor a speech by Swiss National Bank (SNB) Chairman Thomas Jordan at the SNB's Project Helvetia III during the BIS Innovation Summit 2024 in Basel. Jordan's remarks may offer fresh insights into the economy and policy direction.

• USD/CHF extends its downside near 0.9095 amid softer USD on Friday. 
• The Fed kept its benchmark rate on Wednesday as inflation remains high. 
• Swiss CPI inflation was hotter than expected in April, climbing to 1.4% YoY from a rise of 1.0% in March.

The USD/CHF pair trades in negative territory for the third consecutive day on Friday during the early European session. The pair edges lower to 0.9095 after retreating from a seven-month high of nearly 0.9224 due to the softer US Dollar (USD) broadly. Investors await the highly-anticipated US Nonfarm Payrolls (NFP) for April on Friday, which is forecast to show 243K job additions in the US economy. 

The US Federal Reserve (Fed) decided to keep monetary policy on hold on Wednesday. During the press conference, Fed Chair Powell noted that progress on inflation has stalled recently and that it would take longer to gain confidence that inflation is moving towards the 2% target. The higher-for-longer US rate narrative is likely to lift the Greenback and cap the pair’s downside in the near term. Apart from this, the US central bank announced a slowing in its balance sheet runoff (QT). 

The annual inflation in Switzerland accelerated faster than expected in April, the Federal Statistics Office reported on Thursday. The Swiss Consumer Price Index (CPI) inflation climbed to 1.4% YoY in April from a rise of 1.0% in March, above the market consensus of 1.1%. The Swiss Franc (CHF) gained traction after the data was released and created a headwind for the USD/CHF pair.  Last week, Swiss National Bank (SNB) chairman Thomas Jordan said the central bank had brought inflation under control, with the bank estimating price rises to be within its target band for the next few years.

• USD/CHF weakens to 0.9110 following Swiss inflation data on Thursday. 
• The Swiss CPI inflation climbed to 1.4% YoY in April from a rise of 1.0% in March.
• The Fed has kept its benchmark lending rate steady at a 23-year high since July 2023. 
• The US Nonfarm Payrolls (NFP) for April will be in the spotlight on Friday. 

The USD/CHF pair faces some selling pressure on Thursday, supported by the hotter-than-expected Swiss inflation data. The pair currently trades around 0.9110, down 0.48% on the day. Furthermore, the softer US Dollar (USD) came after the US Federal Reserve (Fed) held interest rates at their current levels, adding further downside to the pair. 

The inflation in Switzerland came in hotter than expected in April, according to the Federal Statistical Office of Switzerland on Thursday. The Swiss Consumer Price Index (CPI) inflation rose to 1.4% YoY in April from a rise of 1.0% in March. On a monthly basis, the Swiss CPI figure increased by 0.3% MoM in April, above the market consensus of 0.1%. In response to the data, the Swiss Franc (CHF) attracts some buyers and drags the USD/CHF pair to the 0.9100 support level. 

The US Fed on Wednesday decided to leave its interest rate unchanged as inflation has remained stubbornly high in recent months. The Fed Chair Jerome Powell noted that he doesn’t have a plan to cut interest rates until the Fed has “greater confidence” that price increases are slowing sustainably to its 2% target. During the press conference, Fed’s Powell said that “there has been a lack of further progress.”, adding that interest rates are “restrictive” enough and that it was “unlikely” that the Fed would raise rates again in this cycle. This, in turn, weighs on the Greenback and creates a headwind for the USD/CHF pair. 

Investors will closely monitor the US employment data on Friday. The Nonfarm Payrolls (NFP) for April is expected to show 243K job additions in the US economy, while the Unemployment Rate is projected to remain steady at 3.8% in the same period. 

• USD/CHF trades on a stronger note around 0.9210 ahead of the Fed rate decision on Wednesday.
• The pair keeps the bullish vibe with the overbought RSI condition.
• The first upside barrier is seen at 0.9245; the initial support level is located at 0.9155.

The USD/CHF pair extends its upside to 0.9210 on Wednesday during the early European session. A renewed US Dollar (USD) demand creates a tailwind to a major pair. Furthermore, the Fed is widely expected to keep the policy rate in its current 5.25%–5.50% range on Wednesday and continue to maintain the hawkish stance, which provides some support to the Greenback. 

Technically, USD/CHF maintains the bullish outlook unchanged on the four-hour chart as the cross is above the key 50- and 100-period Exponential Moving Averages (EMAs). The Relative Strength Index (RSI) holds in bullish territory above the midline. However, the overbought RSI condition indicates that further consolidation cannot be ruled out before positioning for any near-term USD/CHF appreciation. 

A decisive break above the upper boundary of the Bollinger Band at 0.9210 will see a rally to a high of October 3, 2023, at 0.9245. Any follow-through buying above this level will expose the 0.9300 psychological round mark. The next upside target is seen at a high of March 16, 2023, at 0.9340. 

On the flip side, the initial support level for the cross will emerge near a high of April 29 at 0.9155. The additional downside filter to watch is the 50-period EMA at 0.9134. The key contention level is located at the 0.9100–0.9110 zone, representing the psychological figure and the 100-period EMA. A breach of the mentioned level will see a drop to the lower limit of the Bollinger Band at 0.9075. 

USD/CHF four-hour chart

• USD/CHF rebounds possibly due to the hawkish remarks from Fed officials.
• Fed Chair Powell said that it may take "longer than expected" to gain confidence if inflation is weakening.
• The Swiss KOF Leading Indicator indicated robust development in the domestic economy.

USD/CHF retraces its recent losses registered on Monday, trading around 0.9130 during the European session on Tuesday. The US Dollar (USD) appreciates, possibly due to hawkish remarks from US Federal Reserve (Fed) officials, indicating no immediate need for rate cuts. This has underpinned the USD/CHF pair.

According to a report by The Economic Times on Monday, Fed Chair Jerome Powell said that it may take "longer than expected" to gain confidence that inflation is progressing toward the central bank's 2% target. Powell also emphasized that the central bank can maintain high rates "as long as needed." Additionally, Fed Governor Michelle Bowman expressed concerns about "upside risks" to inflation. Meanwhile, Minneapolis Fed President Neel Kashkari floated the possibility of no rate cuts occurring this year.

On the Swiss side, the KOF Leading Indicator, which reflects GDP growth and economic trends in Switzerland, increased to 101.8 in April from a downwardly revised 100.4 in March, slightly below forecasts of 102.1. Although the figure suggests stabilization above the long-term average, indicating robust development in the Swiss economy, there is no strong upward momentum anticipated soon.

According to a report from Bloomberg, Swiss National Bank (SNB) Chairman Thomas J. Jordan said last Friday that the central bank is dedicated to closely monitoring inflation. Jordan emphasized that the SNB is prepared to lower interest rates further if needed. While highlighting the SNB's achievements in addressing inflation, he also warned of ongoing high uncertainty and the potential for unexpected shocks.

• USD/CHF loses ground due to the improved risk appetite on Monday.
• Fed is expected to maintain its current interest rate range of 5.25%–5.5% in June.
• SNB Chairman Thomas Jordan stated that the central bank is prepared to lower interest rates again if deemed necessary.

USD/CHF retraces its recent gains that registered on Friday, trading around 0.9120 during the European session on Monday. The US Dollar (USD) depreciates, possibly reflecting a shift toward a risk-on sentiment, which undermines the USD/CHF pair.

However, market analysts expect the US Federal Reserve (Fed) to maintain the current interest rate range of 5.25%–5.5% in its upcoming policy meeting on Wednesday, likely due to concerns about stronger inflation. Additionally, the annual US Core Personal Consumption Expenditures (PCE) Price Index data for March showed a rise on last Friday, suggesting that the Fed may delay any potential rate cuts until September. According to the CME FedWatch Tool, the probability of the Fed keeping interest rates unchanged in the June meeting has increased to 87.7%, up from last week's 81.7%.

On the Swiss side, during the SNB's General Meeting of Shareholders on Friday, Chairman Thomas J. Jordan emphasized the bank's commitment to monitoring inflation closely. He stated that the SNB stands ready to reduce interest rates again when necessary. In March, the SNB surprised markets by lowering its main policy rate by 0.25 percentage points to 1.5%.

Chairman Jordan highlighted the SNB's success in combating inflation but cautioned that uncertainty remains high and shocks can arise unexpectedly. He emphasized the importance of maintaining focus on price stability and warned against calls from critics to broaden the SNB's mandate, labeling such demands as dangerous.

Investors are expected to closely watch the Consumer Price Index (CPI) data scheduled to be released by the Swiss Federal Statistical Office on Thursday. The CPI serves as the primary indicator for measuring inflation and changes in purchasing trends in Switzerland.

• USD/CHF trades in positive territory near 0.9130 on Friday. 
• The US economy expanded at the slowest pace in two years, below the consensus. 
• The escalating Middle East tensions might boost the safe-haven CHF. 

The USD/CHF pair trades on a stronger note around 0.9130 during the early European session on Friday. The modest rebound of the US Dollar (USD) provides some support to the pair. Traders prefer to wait on the sideline ahead of the Swiss National Bank’s (SNB) Chairman Jordan speech, followed by the final reading of the US March Personal Consumption Expenditures Price Index (PCE) on Friday. 

The US advance estimate of Gross Domestic Product (GDP) number grew far less than estimated in the first quarter of 2024, according to the Bureau of Economic Analysis on Thursday. The US economy grew at an annualized pace of 1.6% during the period, missing the expectation of 2.5% growth and coming in lower than fourth quarter GDP, which was revised up to 3.4%. The Greenback attracted some sellers after the data was released. 

Nonetheless, a surprising upside in the quarterly Personal Consumption Expenditure (PCE) inflation measure suggested that the US Federal Reserve (Fed) would not cut interest rates before September. The PCE figure rose at an annualized rate of 3.4% in Q1, compared to the 1.8% pace recorded in Q4 2023. The recent inflation data dampened the hope for June rate cuts, and investors forecast one cut this year, down from three cuts just a few weeks ago. This, in turn, might cap the downside for the Greenback in the near term. 

On the Swiss front, Switzerland’s ZEW Survey Expectations rose to 17.6 in April from the previous reading of 11.5, the Centre for European Economic Research revealed on Wednesday. Furthermore, the rising geopolitical tensions in the Middle East, particularly in Israel and Iran, might boost safe-haven asset flows, benefiting the Swiss Franc (CHF). 

• USD/CHF drifts lower to 0.9145 on the softer US Dollar on Thursday. 
• The hawkish tone of the US Fed has lifted the USD, creating a tailwind for the pair. 
• Switzerland’s ZEW Survey Expectations rose to 17.6 in April, compared to 11.5 prior.

The USD/CHF pair trades on a weaker note near 0.9145 during the early European session on Thursday. Traders seem to prefer to wait on the sidelines ahead of the release of the US preliminary Gross Domestic Product (GDP) Annualized for the first quarter (Q1) later in the day. In the meantime, any development surrounding escalating tensions in the Middle East might boost safe-haven assets like the Swiss Franc (CHF). 

The US Federal Reserve's (Fed) policymakers agreed with the central bank’s position to remain on hold. The hawkish tone of the Fed has provided some support to the Greenback in recent weeks. However, investors have doubts about exactly when monetary policy easing will come. The US GDP growth number might offer some hints about how the US economy performs in Q1 of 2024. 

The first estimated US GDP growth number is estimated to grow at a 2.5% annualized pace during the first quarter, compared to the previous reading of 3.4%. In case the report shows stronger-than-expected data, this might trigger speculation that the US Fed will delay the rate cut cycle, which might lift the US Dollar (USD). 

On Wednesday, data released from the Centre for European Economic Research showed that Switzerland’s ZEW Survey Expectations improved to 17.6 in April compared to 11.5 in the previous reading. Apart from this, the ongoing geopolitical tensions in the Middle East might lift the CHF, a traditional safe-haven currency, and drag the USD/CHF lower. 

• USD/CHF oscillates near a six-month high around 0.9150, exhibiting strength ahead of crucial US data.
• The SNB is expected to extend the rate-cut cycle in June.
• The Fed sees the current interest rate policy framework as appropriate.

The USD/CHF pair hovers around the six-month high of 0.9150 in Wednesday’s early American session. The near-term outlook of the Swiss Franc asset remains bullish, with expectations of further escalation in policy divergence between the Federal Reserve (Fed) and the Swiss National Bank (SNB).

The Fed is expected to keep interest rates at their current levels for a longer period, given the strength in the United States labor market and stubbornly higher inflation due to strong consumer spending.

The SNB will reduce interest rates again in the June policy meeting. The SNB kicked off the global rate-cut cycle after lowering borrowing rates by 25 basis points (bps) to 1.5% in the March meeting. The inflation in the Swiss economy has softened below the 2% target from a longer period, allowing the SNB to slice key interest rates further.

Meanwhile, investors await the crucial US Q1 Gross Domestic Product (GDP) and the core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Thursday and Friday. The economic data will impact market expectations for Fed rate cuts, which are currently expected in the September meeting.

USD/CHF trades back-and-forth in a tight range near the crucial resistance of 0.9110, which is plotted from 1 November 2023 high plotted on a daily timeframe. The asset is expected to extend its upside as the upward-sloping 20-day Exponential Moving Average (EMA) near 0.9075 suggests an upbeat near-term outlook.

The 14-period Relative Strength Index (RSI) oscillates in the bullish range of 60.00-80.00, indicating that a bullish momentum is still active.

Going forward, an upside move above intraday high of 0.9153 will drive the asset towards the round-level support of 0.9200. A breach of the latter will push the asset further to 4 October 2023 high at 0.9232.

In an alternate scenario, fresh downside would appear if the asset breaks below the psychological support of 0.9000, which will expose it to March 22 low at 0.8966, followed by March 1 high at 0.8893.

USD/CHF daily chart

• USD/CHF remains bullish due to disparities in expected policy trajectories between the Fed and SNB.
• The Swiss Franc is under downward pressure as the SNB is anticipated to implement another rate cut in June.
• The US Dollar has rebounded, potentially driven by the higher 10-year yield on US Treasury bond.

USD/CHF hovers near 0.9140 during early European trading hours on Wednesday, maintaining its position close to the six-month high of 0.9152 reached on April 15. The Swiss Franc (CHF) faces challenges due to the notable disparities in expected monetary policy trajectories between the US Federal Reserve (Fed) and the Swiss National Bank (SNB).

Swiss annual inflation dropped to a more than two-year low of 1% in March, emphasizing the SNB's assertion that underlying inflation has moderated. This, coupled with pessimistic Business Confidence indicators and a decline in Retail Sales, has strengthened market expectations that the SNB may implement another rate cut in June.

The CHF had already experienced significant depreciation after the Swiss National Bank unexpectedly reduced its main interest rate by 25 basis points to 1.50% in March, becoming the first major central bank to reverse course on tighter monetary policy.

In the United States (US), the probability of the Federal Reserve's maintaining interest rates unchanged in the June meeting has risen to 84.6%, up from the previous week's 82.7%, according to the CME FedWatch Tool.

The US Dollar Index (DXY), which measures the US Dollar (USD) against six major currencies, has rebounded due to a higher 10-year yield on US Treasury bonds, standing at 4.62%, up by 0.54% at the time of writing. However, disappointing US Purchasing Managers Index (PMI) data is weighing on the Greenback, thereby limiting the advance of the USD/CHF pair.

In April, the preliminary S&P Global Composite PMI for the US declined to 50.9 from the previous reading of 52.1. Additionally, the Manufacturing PMI fell to 49.9 from 51.9 in the previous reading, below the estimated 52.0. Similarly, the Services PMI decreased to 50.9, compared to the prior 51.7, falling short of the expected 52.0.

• USD/CHF faces pressure above 0.9100 as US Dollar drops after weak S&P Global PMI data for April.
• The preliminary Manufacturing PMI falls below the 50.0 threshold.
• The Fed advocates for keeping interest rates at their current levels longer.

The USD/CHF pair faces a sell-off above the round-level support of 0.9100 in Tuesday’s early American session. The Swiss Franc asset falls as the US Dollar Index (DXY) drops to 105.80 after the S&P Global reported weak preliminary PMI data for April.

The agency reported that both Manufacturing and Services PMI missed expectations. The Manufacturing PMI slips below the 50.0 threshold that separates expansion from contraction. The factory data lands at 49.9 lower than the expectations of 52.0 and the prior reading of 51.9. The Services PMI drops to 50.9 from the consensus of 52.0 and the former reading of 51.7.

Going forward, investors will shift focus to the United States core Personal Consumption Expenditure Price Index (PCE) data for March, which will be published on Friday.

The core PCE Price Index data is the Federal Reserve’s (Fed) preferred inflation measure. It is estimated to have grown steadily by 0.3% on a month-on-month basis, with annual inflation softening to 2.6% from 2.8% recorded in February. This will influence market expectations of Fed rate cuts, which are currently anticipated in the September meeting.

10-year US Treasury yields rise further to 4.64% as the Fed continues to argue that the current monetary policy framework is appropriate as stubbornly higher inflation in the first quarter of this year cannot be ignored.

The formation of the USD/CHF pair on a four-hour timeframe appears to be a Rising Wedge chart pattern, which indicates a limited upside and is generally followed by a breakdown move. The 20-period Exponential Moving Average (EMA) at 0.9100 glued with the Swiss Franc asset, suggesting indecisiveness among market participants.

The 14-period Relative Strength Index (RSI) shifts to the 40.00-60.00 range, indicating a consolidation ahead.

Fresh downside would appear if the asset breaks below the psychological support of 0.9000, which will expose it to March 22 low at 0.8966, followed by March 1 high at 0.8893.

In an alternate scenario, an upside move above April high of 0.9150 will drive the asset towards the round-level support of 0.9200. A breach of the latter will push the asset further to 4 October 2023 high at 0.9232.

USD/CHF four-hour chart

• USD/CHF gains ground near 0.9125 on the risk-on mood in Tuesday’s early European session. 
• The hawkish comments from the Fed lift the Greenback and create a tailwind for USD/CHF. 
• The ongoing geopolitical tensions in the Middle East might boost safe-haven assets like the Swiss Franc. 

The USD/CHF pair trades on a stronger note for the second consecutive day around 0.9125 during the early European session on Tuesday. The risk-on environment amid easing fears of wider tensions in the Middle East provides some support to the US Dollar (USD). Investors await the US preliminary S&P Global Purchasing Managers Index (PMI) data for April on Tuesday for fresh impetus. 

The Fed Bank of Chicago revealed on Monday that the National Activity Index improved to 0.15 in March from 0.09 in the previous reading. However, the data had little to no impact on the Greenback after the release. The hawkish remarks from US Federal Reserve (Fed) policymakers triggered the expectation that the US central bank would delay the rate cut, which boosts the USD against the Swiss Franc (CHF). 

The US preliminary Gross Domestic Product Annualized for the first quarter (Q1) and March’s Personal Consumption Expenditures Price Index (PCE) later this week will be closely watched events and might offer some hints about the possibility of policy easing by the Fed. In case the reports show upbeat data, this could boost the USD and cap the pair’s upside.

On the other hand, the ongoing geopolitical tensions in the Middle East might boost safe-haven flows, benefiting the CHF. Apart from this, the Swiss ZEW Survey for April will be released on Wednesday. On Friday, Swiss National Bank (SNB) Chairman Jordan's speech will be in the spotlight. 

The US Dollar consolidates near highs with bears contained at 0.9075.

Easing geopolitical fears and monetary policy divergence are weighing on the Swiassie.

USD/CHF: Support at 0.9075 is closing the path towards the key 0.8980 - 0.9000 area.

The US Dollar regained lost ground on Friday, following a risk-averse reaction to Israel’s drone attack on Iran, and the pair has remained consolidating on Monday, with bears contained above 0.9075.

A moderate risk appetite, amid ebbing geopolitical fears, and lower US Treasury yields have weighed on demand for the USD. The US Dollar Index, which measures the price of the Dollar against a basket of the six most traded currencies has remained practically flat in the absence of key fundamental data.

Risks that the Middle East conflict might escalate into a regional war, involving Iran, have faded, at least for now, and that is likely to keep demand for the safe-haven Swiss Franc subdued.

In the US, investors have already priced in that the Fed will delay the monetary easing kick-off, and, most probably also reduce its size, and are looking for further clues about the Fed's policy plans. In this sense, Thursday’s US Q1 Gross Domestic Product and Friday’s PCE Prices Index will be analysed with particular interest.

USD/CHF Price Analysis: Technical outlook

Technical indicators show the bullish trend still active, with no clear sign of a trend shift in sight apart from some bearish divergence in the 4 H RSI. Immediate support at 0.9075 is closing the path towards the key 0.8980 - 0.9000 area, where the late-march lows and trendline support meet.

On the upside, a break of 0.9143 would resume the bullish trend and pave the path for a retest of November’s high, at 0.9240.

USD/CHF Daily Chart

• USD/CHF has risen over 8.0% since the start of 2024. 
• It has broken above some very important levels. 
• The question now is, has USD/CHF changed trend? 

USD/CHF was in a long-term downtrend until the pair found a floor at the end of 2023. 

Since then USD/CHF has made steady progress higher, gaining over 8.0% in the first three months of 2024. 

An interesting question now is whether from a technical point of view, the long-term trend has changed from bearish to bullish? 

This is important because, as the old adage goes “the trend is your friend until the bend at the end.”

In short, has USD/CHF met its “bend” and made enough progress to reverse its downtrend?

USD/CHF Weekly Chart

In February USD/CHF rose above the last major lower high of the prior downtrend which formed in December 2023, at 0.8821. Technical analysts consider this as a key level. If price breaks above it, it increases the chances the asset has undergone a trend reversal. 

In March USD/CHF broke above the red 50-week Simple Moving Average (SMA) – another sign the long-term downtrend might be ending. At the same time it breached a long-term down trendline, providing yet more evidence of a reversal. 

During its rise USD/CHF has formed two sets of peaks and troughs (two “higher highs” and two “higher lows”). This further suggests a heightened probability the pair might be reversing trend. If it had only formed one peak and trough it might still be said to be correcting rather than reversing. This is because it could still be a common ABC three-wave correction. Because it has formed two, however, this cannot now be the case. 

Momentum has been reasonably solid during the move higher, though not quite as strong as the bearish momentum on the corresponding way down – this unfortunately is evidence the move may yet still be only a pullback within a broader downtrend. The difference in momentum is mild, however, reducing the risk that is the case. 

USD/CHF has now reached a formidable band of resistance from the 100-week and 200-week SMAs coiling just above the current highs in the 0.9100s. These remain a tough obstacle for bears to overcome. 

To really seal the deal on a reversal of the long-term downtrend in USD/CHF arguably must decisively break above the two major MAs currently bearing down on price. 

A decisive break is one characterized by the formation of a long green bullish candle that pierces through the MAs and closes near its high or three consecutive bullish candles that breach the level. 

Another key level is the October 2023 high at 0.9244 and this should arguably also be breached for there to be enough evidence to support the view USD/CHF had entered an uptrend. 

Last week USD/CHF also formed a bearish Hanging Man Japanese candlestick pattern which if followed by a bearish candle this week would signal a potential short-term reversal lower. This would keep bearish hopes alive and delay further the moment when it could be said with any degree of confidence that USD/CHF was in a long-term uptrend.

• USD/CHF holds positive ground near 0.9115 in Monday’s early Asian session. 
• Many Fed officials prefer to wait longer than previously anticipated to cut rates amid the elevated inflation, lifting the Greenback. 
• SNB Chairman Thomas Jordan said monetary policy should remain focused on price stability. 

The USD/CHF pair trades on a positive note on Monday during the early European session. The uptick of the pair is supported by the lower bets on rate cut expectations from the Federal Reserve (Fed), with traders seeing just one or two rate cuts happening this year. The preliminary US Gross Domestic Product Annualized for the first quarter (Q1) and the Personal Consumption Expenditures (PCE) Price Index will be the highlights for this week.

With a robust US economy and stickier-than-expected inflation, investors dial back interest rate cut expectations. Several Fed officials prefer to wait longer than previously expected to cut rates following a series of surprisingly high inflation readings. The high-for-longer US rate narrative lifts the Greenback and acts as a tailwind for the USD/CHF pair. 

On Friday, Chicago Federal Reserve (Fed) President Austan Goolsbee hinted at a longer timeline for interest rate cuts as progress on inflation had “stalled”, adding inflation has significantly dropped from its pandemic-era peak of 9.1%, but remains stubbornly above the Fed’s target. Meanwhile, Atlanta Fed President Raphael Bostic noted that the US central bank wouldn’t cut rates until the end of the year.

On the Swiss front, Swiss National Bank (SNB) Chairman Thomas Jordan said on Saturday that monetary policy should remain focused on price stability. He said that economic growth and productivity are too low and many countries are running too much debt and excessive deficits. Apart from this, the escalating geopolitical tensions in the Middle East, particularly Israel and Iran, might boost safe-haven assets like Swiss France and cap the pair’s upside. 

• The US Dollar pares previous losses and returns to levels right below 0.9100
• A doji candle in the weekly chart and the bearish divergence on intra-day charts suggest the possibility of a deeper correction.
• USD/CHF bears need to breach 0.9075 support level.

The US Dollar has retraced previous losses, as news of an Israeli attack on Iran boosted the safe-haven CHF, to consolidate at previous ranges, above the 0.9075 resistance area.

On Friday, Chicago Fed President Austen Goolsbee has reiterated the the lack of progress on inflation and reaffirmed the data-dependant approach on further monetary policy decisions. The Dollar has traded moderately higher following these comments

Fundamentals are Dollar-supportive, as the Federal Reserve is likely to keep rates at high levels for a longer time, while the SNB has cut rates already and is likely to cut them again later this year.

USD/CHF Technical Analysis

The pair, however, has been trading without a clear direction below the 0.9145 resistance area following a strong rally from early January. The weekly chart is set to print a Doji candle, which often indicates that a potential correction might be ahead.

A bearish divergence on the 4-hour chart is also pointing to that direction, although bears need to confirm below 0.9075 to confirm a trend shift. Below there, the next targets would be the 0.9000 area and the trendline support at 0.8980. On the upside, a bullish reaction beyond 0.9245 would expose October’s high, at 0.9240.
 

USD/CHF 4-Hour Chart

• USD/CHF trims daily losses on expectations of de-escalating the Israel-Iran situation.
• An Iranian official stated there is currently no immediate plan for retaliation against the Israeli airstrikes.
• The US Dollar may gain ground on higher US Treasury yields as Fed officials conveyed hawkish messages on Thursday.

USD/CHF trades around 0.9080 during the European hours on Friday. The pair trims intraday losses after the statement made by an Iranian official that there is no immediate plan of retaliation against Israeli airstrikes.

The safe-haven Swiss Franc (CHF) strengthened as risk aversion spread across financial markets, triggered by reports from ABC News confirming Israeli missile strikes on a site in Iran on Friday, which heightened tensions in the Middle East. Additionally, Reuters cited Iran’s Fars News Agency reporting that locals heard explosions at the central Isfahan airport.

In the near term, the Swiss Franc is anticipated to encounter downward pressure as the Swiss National Bank (SNB) is projected to further decrease interest rates. With price pressures in the Swiss economy persisting below the targeted rate of 2%, SNB might implement another rate cut during its upcoming June meeting.

The US Dollar Index (DXY), which gauges the US Dollar (USD) against six major currencies, edges lower to near 106.10. Nevertheless, hawkish comments from Federal Reserve (Fed) officials on Thursday prompted a rise in US Treasury yields. At present, 2-year and 10-year yields on US Treasury bonds are at 4.96% and 4.58%, respectively. The higher yields may attract support for the Greenback, thus underpinning the USD/CHF.

Atlanta Fed President Raphael Bostic emphasized that US inflation is unreasonably high and stressed the need for the Fed to continue making strides in addressing inflation. Additionally, New York Fed President John Williams underscored the Fed's dedication to being guided by data and indicated that he does not currently see an urgent necessity to decrease interest rates.

• USD/CHF drops below 0.9100, dragged by a correction in the US Dollar.
• The US Dollar drops as traders reprice the interest rate outlook of other central banks.
• The SNB could cut interest rates further amid easing price pressures.

The USD/CHF pair falls below the round-level support of 0.9100 in Thursday’s European session. The Swiss Franc asset comes under pressure as the US Dollar drops amid cheerful market mood.

The US Dollar faces selling pressure after refreshing a five-month high. The US Dollar Index (DXY) drops to 105.85 as investors reassess speculation about rate cuts by other central banks from developed nations. Federal Reserve (Fed) Chair Jerome Powell supported keeping interest rates higher for an extended period, with inflation remaining stubbornly higher in the first three months of this year, but policymakers from other central banks also turned cautious about premature rate cuts.

This forced traders to price out early rate-cut bets by central banks, such as the Bank of England (BoE) and the Reserve Bank of New Zealand (RBNZ).

Meanwhile, the appeal for risk-perceived assets remains strong. S&P 500 futures have posted significant gains in the London session. 10-year US Treasury yields correct further to 4.57%.

The US Dollar could regain bullish traction, knowing that the United States economy remains resilient due to strong economic growth, tight labor conditions and robust households’ spending. While other economies remain exposed to a technical recession.

On the Swiss Franc front, investors could capitalize the corrective move to build fresh longs. In the near-term, the Swiss Franc is expected to face more downside as the Swiss National Bank (SNB) is expected to reduce interest rates further. Price pressures in the Swiss economy remain below the desired rate of 2%, offering relief to SNB policymakers to lower borrowing rates further.

• USD/CHF is trending higher within a rising channel. 
• The trend is expected to continue to the next set of targets. 
• A break below the lower channel line would be required to signal a reversal. 

USD/CHF is rallying in an ascending channel on the daily chart. It is in a short and medium-term uptrend which is expected to continue higher given the old adage that the “trend is your friend.” 

USD/CHF Daily Chart

USD/CHF has been consolidating over the past few days in the lower 0.9100s but it will probably eventually break higher in accordance with the dominant uptrend. A break above the 0.9152 April highs would confirm more upside. 

The next target to the upside comes in at around 0.9173 where some major moving averages converge on higher time-frame charts. 

Following that, the next upside target would be located at 0.9240 the level of previous major swing highs made in October 2023.

The Relative Strength Index (RSI) is not overbought any longer, suggesting scope for further upside. 

A decisive break below the lower boundary of the channel, currently at roughly 0.9020, would reverse the outlook and bring into question the direction of the intermediate trend. 

A decisive break would be one characterized by a breach with a longer-than-average red candlestick or three consecutive red candlesticks.