Forex Trading Tools and Services

Currencies

USD/CHF Price Outlook: Fails to Hold Ground Above 0.9000 Due to Dollar Weakness and SNB Policy Rumors

  • BY
  • February 18, 2025
  • 0 Comments

The USD/CHF currency pair fails to hold ground above the psychological mark of 0.9000 as the US Dollar grapples with weakness in holding its recovery. Although the Federal Reserve continues to adhere to keeping interest rates unchanged, the dovish stance of the Swiss National Bank, fueled by weak inflation figures, increases the likelihood of negative interest rates. The US Dollar Index (DXY) fluctuates near the 107.00 level, capping the upside for USD/CHF. The technical indicators indicate declining bullish momentum, with the 14-week RSI dropping from the high bullish zone. A clean break above 0.9244 will open the way for a further rise, while a fall below 0.9000 might initiate a deeper slide towards significant support levels. KEY LOOKOUTS • A decisive fall below this level may cause further weakness, testing the crucial support levels at 0.8958 and 0.8900. • The Federal Reserve’s choice to keep interest rates between 4.25%-4.50% favors the US Dollar but caps its upside potential. • Weak CPI data feeds speculation of possible negative interest rates, weakening the Swiss Franc and influencing USD/CHF’s direction. • A move above the October 2023 high may leave the way open towards the significant resistance levels of 0.9300 and 0.9342. The USD/CHF currency pair is at a crossroads with the inability of the currency to hold on to levels above the psychological mark of 0.9000. The steady monetary policy by the Federal Reserve defends the US Dollar, but a decline in the momentum in the Dollar Index (DXY) keeps gains on a leash. While this, coupled with the dovish tone from the Swiss National Bank, fuel rumors of negative interest rates that might further soften the Swiss Franc, the pair is technically due a strong breakout above 0.9244 to continue its rally towards 0.9300 and beyond. A fall below 0.9000 may see it slide further to significant support levels of 0.8958 and 0.8900. USD/CHF has difficulty staying above 0.9000 as the US Dollar is met with resistance and the dovish stance of the Swiss National Bank causes the Franc to weaken. Further gains may be triggered by a breakout above 0.9244, and a fall below 0.9000 can cause a deeper correction. • The pair cannot hold gains above this psychological level as the US Dollar runs out of steam. • Keeping interest rates at 4.25%-4.50% by the Federal Reserve favors the Dollar but caps upside. • Soft inflation numbers add to speculation that the SNB could start negative interest rates, which would weaken the Swiss Franc. • The DXY is unable to hold above 107.00 levels, which affect the short-term price action of the USD/CHF pair. • A breakout above this level may signal more advancements to 0.9300 and 0.9342 levels. • A fall below 0.9000 may initiate further weakness, challenging support at 0.8958 and 0.8900. • The 14-week RSI is in the neutral zone, indicating that bearish momentum in USD/CHF is waning. The USD/CHF currency pair is struggling to hold above the important psychological level of 0.9000, as the US Dollar cannot hold its advance. Though the Federal Reserve has reaffirmed its policy of maintaining interest rates unchanged at 4.25%-4.50%, the US Dollar Index (DXY) is still unstable near 107.00, capping the rally for USD/CHF. The market sentiment has also been affected by fear of future trade policies under former US President Donald Trump, and thus there is uncertainty in currency movements. At the same time, on the Swiss side, also fueling rumor has been soft inflation data that the Swiss National Bank (SNB) might drive interest rates into negative numbers in order to avoid prolonged deflation, which could weaken the Swiss Franc further in the short term. USD/CHF Daily Price Chart TradingView Prepared by ELLYANA The USD/CHF currency pair cannot maintain above the psychological mark of 0.9000 as the US Dollar is confronted with resistance in the face of a volatile DXY and stable Federal Reserve policy. In contrast, poor Swiss inflation figures have increased speculation that the Swiss National Bank (SNB) may drive interest rates into negative territory, further weakening the Swiss Franc. TECHNICAL ANALYSIS USD/CHF is in the process of consolidating, with major resistance at 0.9244 serving as a critical breakout level for additional gains up to 0.9300 and 0.9342. The 20-week Exponential Moving Average (EMA) around 0.8947 is rising, reflecting long-term bullish inclination. Yet, the 14-week Relative Strength Index (RSI) has fallen from the bullish area of 60.00-80.00 into the neutral area of 40.00-60.00, reflecting the loss of upside momentum. If the pair is unable to hold at 0.9000, it may force a downside motion towards major support levels of 0.8958 and 0.8900. A strong break above 0.9244 or below 0.9000 will set the next major trend for USD/CHF. FORECAST The USD/CHF pair has the potential to move up if it can break above the major resistance level of 0.9244. A clean breakout above this level may initiate a rally towards the subsequent resistance levels of 0.9300 and 0.9342. The 20-week Exponential Moving Average (EMA) still remains in an upward slope, which is an indication of a long-term bull trend. Moreover, if the Federal Reserve continues to adopt a stable interest rate policy while US economic fundamentals continue to remain robust, the US Dollar can again strengthen, driving USD/CHF upward. Any indication of additional monetary tightening or hawkish remarks from the Fed can serve as a trigger for a sustained bullish trend. On the bearish side, a breakdown below the psychological support of 0.9000 can indicate a more severe correction in the pair. A break below this point can leave USD/CHF vulnerable to further losses, with important support points at 0.8958 and 0.8900. The 14-week Relative Strength Index (RSI) has dropped out of its bullish zone, signaling declining momentum, which will put further pressure on the pair downwards. Further, if the Swiss National Bank (SNB) does not undertake aggressive rate reductions and the Swiss Franc rises due to risk-off sentiment across the globe, USD/CHF can experience selling pressure. Any surprise US monetary policy developments or

Read More
Currencies

USD/CHF Closes at a Flat Note Around 0.9050 on Thursday as Investors Wait for Swiss Trade Balance and US GDP Report

  • BY
  • January 30, 2025
  • 0 Comments

USD/CHF was flat around 0.9070 during the Asian session on Thursday as investors await the much-awaited economic releases from both Switzerland and the United States. This currency pair remains mostly driven by a weaker US Dollar, where the US Dollar Index (DXY) hovers below 108.00. Investors are waiting for the US Q4 Gross Domestic Product (GDP) report, which is expected to show slowing annualized growth to 2.6% from 3.1% previously, together with rising concerns about inflation. In Switzerland, the ZEW Survey Expectations for January came out at 17.7, a strong improvement from -20. Market participants also observe the Swiss Trade Balance and KOF Leading Indicator data scheduled on Thursday to catch more directional movement for USD/CHF. KEY LOOKOUTS • Trade expects US GDP, which comes in at a slow rate at 2.6% and will thus come down from previous figures of 3.1%, hence boosting the strength of the USD currency and general feelings of the markets. • Switzerland’s trade balance data for December could impact CHF demand, providing insight into the country’s export performance and economic health. • The Fed’s cautious stance and recent policy statements may drive USD movement, with investors analyzing inflation signals and future rate decisions. • The Swiss KOF Leading Indicator for January will offer clues about Switzerland’s economic outlook, potentially affecting USD/CHF price action. USD/CHF is under focus as market participants await some key economic releases that are expected to drive market direction. The US Q4 GDP report, which is likely to come in at 2.6% from 3.1%, will be keenly watched to see how this affects the strength of the USD. Meanwhile, the Swiss Trade Balance for December and the KOF Leading Indicator for January are due for release, which would give a good idea of the economic outlook in Switzerland. However, the Federal Reserve is still holding back on monetary policy, from no instant rate cuts despite recent reductions. All these factors together determine how markets react to or follow the near-term movement of the USD/CHF in line with financial performance and the decisions of the central bank. USD/CHF remains stable as traders wait for the key economic data, including the US Q4 GDP report and Switzerland’s Trade Balance. The Federal Reserve’s cautious monetary policy and inflation concerns continue to affect the movement of USD and keep investors vigilant about the changing market sentiment. • The pair stays stable around 0.9070 as traders wait for the key economic data for fresh market direction. • Expected to slow to 2.6% from 3.1%, impacting USD strength and overall investor sentiment. • December’s trade balance release will provide insights into Switzerland’s export performance and economic stability. • Switzerland’s economic outlook will be assessed based on the upcoming KOF Leading Indicator for January. • The Fed’s cautious approach to interest rates influences market expectations and USD movement. • The US Q4 GDP Price Index is projected to rise to 2.5%, indicating persistent inflationary pressures. • Traders closely follow economic indicators and central bank signals to figure out the next move of USD/CHF. USD/CHF remains steady at around 0.9070 while waiting for important economic data releases both from the US and Switzerland. The US Q4 GDP report is going to be released that is likely to reflect the slowing down of economic growth. A decline from 3.1% to 2.6% is estimated. This data, along with the US GDP Price Index rising to 2.5%, highlights persistent inflation concerns that may influence Federal Reserve policy decisions. Meanwhile, the Fed’s recent decision to maintain interest rates at 4.25%-4.50% and its cautious stance on inflation continue to shape market sentiment, potentially providing support for the US Dollar. USD/CHF Daily Chart TradingView Prepared by ELLYANA In Switzerland, investors are closely watching the release of the Swiss Trade Balance for December and the KOF Leading Indicator for January. The Swiss economy showed signs of improvement in January, with the ZEW Survey Expectations jumping to 17.7 from -20, indicating growing optimism. These upcoming data points will offer further insight into Switzerland’s economic health and could impact CHF demand. As the traders assess these indicators, USD/CHF is expected to be responsive to any surprises in economic data or changes in the central bank policies. TECHNICAL ANALYSIS USD/CHF is consolidating around the 0.9070 level after two consecutive days of gains. The pair faces immediate resistance near 0.9100, a psychological level that, if breached, could push the price towards the next resistance at 0.9150. On the downside, support is seen around 0.9020, with a break below potentially opening the door for further declines toward 0.8980. The Relative Strength Index (RSI) remains neutral, indicating a lack of strong momentum in either direction. Meanwhile, the 50-day and 200-day moving averages suggest a mixed trend, with the pair needing a decisive move above resistance or below support to confirm a new directional bias. FORECAST USD/CHF could gain bullish momentum if the pair breaks above the 0.9100 resistance level, which would then signal further upside potential. A sustained move above this level could push the price toward 0.9150, with the next key resistance at 0.9200. The US Dollar might strengthen if the upcoming US Q4 GDP data beats expectations, reinforcing the Federal Reserve’s cautious stance on monetary easing. Furthermore, ongoing concerns over inflation, along with hawkish Fed statements, are going to push demand for USDs, thus favoring a push higher in USD/CHF. Conversely, selling pressure could occur in USD/CHF, if the quote fails to close above the main support level located at 0.9020. The breakout below the key level might attract the quote downward to 0.8980 and further on to the strong support located at 0.8950. Weak US GDP data or signs of economic slowdown could weigh on the USD, while strong Swiss economic indicators, such as an improved Trade Balance or KOF Leading Indicator, may boost CHF strength. Additionally, any dovish signals from the Federal Reserve regarding future rate cuts could put further downward pressure on USD/CHF in the near term.

Read More
Currencies

USD/CHF Pairs Gain Steam Following Trump’s Tariff Proposal Sparks Market Responses

  • BY
  • January 22, 2025
  • 0 Comments

The USD/CHF currency pair increased above 0.9050 and rebounded to 0.9070 early in European trading on Wednesday following a generally positive US Dollar as former President Donald Trump floated the idea of tariffs. Mr. Trump called for 25% duties on trading partners such as Canada, Mexico, China, and the EU due to economic and geopolitical reasons. Analysts suggest these actions could elevate inflation, reducing the likelihood of multiple Federal Reserve rate cuts this year, further supporting the USD. Meanwhile, geopolitical tensions, such as the Russia-Ukraine conflict and Israel-Hamas developments, have boosted safe-haven flows, potentially benefiting the Swiss Franc. However, the Swiss National Bank’s dovish stance, with rates at 0.5%, continues to weigh on the CHF, presenting a mixed outlook for the USD/CHF pair. KEY LOOKOUTS • Potential 25% duties on key trading partners could bolster USD strength and impact global trade dynamics. • Inflation risks might reduce the likelihood of multiple rate cuts in 2025, further supporting the USD. • Continued dovish stance, with interest rates at 0.5%, could weigh on the CHF despite safe-haven flows. • Ongoing Russia-Ukraine conflict and developments in the Israel-Hamas ceasefire talks remain crucial for safe-haven currency dynamics. The USD/CHF pair regained strength, climbing above 0.9050 and reaching 0.9070 during early European trading, fueled by a stronger US Dollar following former President Trump’s tariff announcements. Proposals for 25% duties on trading partners, including China, Mexico, and the EU, raised concerns over inflationary pressures, potentially limiting the Federal Reserve’s rate cuts this year and boosting USD demand. Meanwhile, the Swiss Franc faces mixed influences as geopolitical tensions, such as the Russia-Ukraine conflict and Israel-Hamas negotiations, support safe-haven flows, while the Swiss National Bank’s dovish stance, with rates at 0.5%, continues to weigh on the currency. This complex interplay of global trade policies, central bank strategies, and geopolitical developments will remain key to the USD/CHF outlook. The USD/CHF pair rebounded above 0.9050, driven by USD strength following Trump’s tariff proposals on key trading partners. Geopolitical tensions boost safe-haven flows, while SNB’s dovish stance weighs on CHF. • The pair rebounded above 0.9050, reaching 0.9070 during early European trading hours. • Announcements of 25% duties on trading partners like China, Mexico, and the EU boosted the US Dollar. • Potential tariffs could drive inflation, reducing the likelihood of multiple Federal Reserve rate cuts in 2025. • SNB’s dovish stance, maintaining rates at 0.5%, continues to weigh on the Swiss Franc. • Conflicts like Russia-Ukraine and Israel-Hamas influence safe-haven flows, supporting the CHF. • A tug-of-war between safe-haven demand for CHF and USD strength due to tariff expectations shapes the pair’s movement. • Investors are closely watching global trade developments, central bank policies, and geopolitical issues to gauge USD/CHF trends. The USD/CHF pair climbed above 0.9050 and reached 0.9070 during early European trading hours, recovering from a two-day losing streak. This rebound was fueled by a stronger US Dollar following former President Donald Trump’s announcement of potential tariffs on key trading partners, including China, Mexico, and the European Union. The proposed 25% duties by Trump are expected to start from as early as February, with inflationary concerns. Analysts believe that the Federal Reserve will then reduce the rate cuts anticipated for 2025 and support the USD further. Such trade policies indicate the impact they have on currency markets worldwide as the USD keeps gaining strength. USD/CHF Daily Price Chart. Source: TradingView Prepared By ELLYANA Meanwhile, the Swiss Franc faces a complex set of influences. On one hand, geopolitical tensions, such as the Russia-Ukraine conflict and Israel-Hamas ceasefire negotiations, have increased safe-haven demand, supporting the CHF. On the other hand, the Swiss National Bank’s dovish stance, maintaining rates at 0.5%, continues to weigh on the currency. This divergence creates a mixed outlook for USD/CHF, as global trade uncertainties and monetary policies play critical roles. Investors will closely monitor geopolitical events and central bank decisions to understand the pair’s future direction. TECHNICAL ANALYSIS From a technical analysis point of view, the USD/CHF pair’s recovery to 0.9070 may indicate a breakout from its recent consolidation phase. Key resistance levels lie at 0.9100, which, if broken, could indicate further bullish momentum towards 0.9150. On the downside, immediate support is observed near 0.9050, with a stronger floor at 0.9020. The Relative Strength Index (RSI) indicates neutral momentum, suggesting room for further upward movement if buying pressure persists. Additionally, the pair is trading above its 50-day moving average, reinforcing the bullish sentiment in the short term. However, any reversal below key support levels may shift the focus back to the bearish zone. FORECAST The USD/CHF pair has shown signs of recovery, with the potential for further upside if the US Dollar maintains its strength. Positive sentiment surrounding Trump’s tariff plans, coupled with expectations of limited Federal Reserve rate cuts, could support the USD. If the pair sustains momentum above the 0.9070 level, the next resistance at 0.9100 may come into focus, followed by a potential move toward 0.9150. Other bullish catalysts include better US economic data or increased inflation expectations, which may solidify the Federal Reserve’s less dovish position and strengthen the pair. On the other hand, downside risks to the USD/CHF pair still exist because of the safe-haven appeal of the Swiss Franc. Geopolitical tensions, such as the Russia-Ukraine conflict and Israel-Hamas negotiations, could increase demand for the CHF. If the pair fails to hold above the 0.9050 support, it may slide toward 0.9020 or lower, with a breach opening the door to further losses. Moreover, any unexpected dovish shift in US monetary policy or better-than-expected Swiss economic data could add downward pressure to the pair, reversing its recent gains.

Read More