USD/CHF Price Analysis: Falls back to 0.8900 amid fears of SNB’s intervention

• USD/CHF drops back to 0.8900 as Swiss Franc strengthens amid fears of SNB’s stealth intervention plans.
• A weak Swiss Franc had made Swiss exports competitive in the global market.
• The US Dollar bounces back as investors turn cautious ahead of the US NFP.

The USD/CHF pair retreats while attempting to extend recovery above the immediate resistance of 0.8950 on Thursday. The Swiss Franc asset drops as the Swiss Franc strengthens amid growing speculation that the Swiss National Bank (SNB) will intervene in the currency market to boost the Swiss Franc’s demand.

SNB policymakers worry that Swiss exports have become competitive due to weak currency, which could prompt upside risks to inflation. On the economic front, monthly Swiss Unemployment Rate for May came in at 2.3%, matches estimates and the prior release.

Meanwhile, the US Dollar (USD) recovers intraday losses amid uncertainty ahead of the United States (US) Nonfarm Payrolls (NFP) data for May, which will be published on Friday. The US NFP is estimated to report that the hiring process remains robust as fresh payrolls were 185K, higher than the prior release of 175K. The Unemployment Rate is expected to have remained steady at 3.9%.

Investors will also focus on the Average Hourly Earnings data, which gauges wage growth, that has remained a major driver to persistent price pressures. Annual Average Hourly Earnings are forecasted to have grown steadily by 3.9%.

Temporarily, the USD/CHF pair finds support near the horizontal support plotted from February 14 high at 0.8886. Earlier, the Swiss Franc asset weakened after breaking below the horizontal support marked from April 5 near 0.9000, which has become a major resistance for the US Dollar bulls.

The overall trend is bearish as the 20- and 50-day Exponential Moving Averages (EMAs) appear to deliver a bear cross near 0.9035.

The 14-period Relative Strength Index (RSI) shifts into the bearish range of 20.00-60.00 from the bullish range of 40.00-80.00, indicating a bearish reversal.

More downside would appear if the asset breaks below June 4 low of 0.8900, which will open room for March 21 low at 0.8840 and the round-level support of 0.8800.

On the flip side, a recovery move above the psychological resistance of 0.9000 will drive the asset towards June 3 high at 0.9036, followed by May 28 low at 0.9086.

USD/CHF daily chart