Swiss Franc Dynamics: USD/CHF Eyes Bullish Reversal

Quick Look

• USD/CHF trades between support at 0.8670 and resistance at 0.8810, hinting at a bullish reversal.
• Swiss CPI aligns with forecasts; SNB holds rates at 1.75%.
• US economic data shows mixed signals; however, USD dominance persists in the market.
• EUR/CHF sees gains, with potential for further rise as long as support at 0.9510 holds.
• Technical analyses suggest key levels for both pairs, with the market eyeing upcoming US retail data.

The USD/CHF pair navigates a crucial phase between a support level at 0.8670 and a resistance threshold at 0.8810. Recent trading sessions have unveiled a pattern of doji candlesticks, traditionally interpreted as indicators of a forthcoming bullish reversal. This development comes against the backdrop of stable Swiss economic indicators. Specifically, the country’s CPI inflation figures have aligned with initial estimates, albeit with a notable dip in the core measure. Meanwhile, the Swiss National Bank (SNB) has maintained its interest rate at 1.75%, underscoring a cautious yet steady approach to monetary policy.

Mixed US Data Bolsters USD; Eyes on Retail Impact

Turning our gaze to the US, the economic narrative presents a mixed bag. As the CPI measures, inflation rates have consistently outpaced forecasts, marking a second consecutive month of unexpected acceleration. On the employment front, the Non-Farm Payroll (NFP) report delivered a paradox, with the headline number surpassing expectations but unemployment rates and average hourly earnings not meeting forecasts.

Despite these divergent trends, the USD/CHF pair has exhibited remarkable resilience, with USD buyers maintaining a strong foothold. The market now eagerly awaits US retail sales data, a key determinant that could influence future trading strategies. Analysts recommend a neutral stance until a decisive break above the 200-day Simple Moving Average (SMA) occurs, which could tilt the balance in favour of a clearer direction.

Swiss Franc’s 3.5 Cent Rally: Key Levels to Watch

The Swiss Franc to Euro pair has embarked on an impressive journey, registering gains of approximately 3.5 cents since early February. This rally has shattered previous barriers, ascending beyond all moving averages, with the 200-day SMA now serving as a pivotal support level.

Currently positioned below the 0.9630 mark, the CHF/EUR intraday bias remains neutral. Analysts posit that a sustained rally is conceivable as long as the 0.9510 support level remains intact. A breach of the 0.9630 threshold could pave the way to 0.9658, while a dip below 0.9510 might signal a deeper correction. The long-term perspective hinges on the 0.9683 resistance level in the grander scheme. A decisive breakout above this point could mark a medium-term bottom at 0.9252, setting the stage for further ascension towards the 0.9773 level, representing a 61.8% retracement of the downward trajectory from 1.0095 to 0.9252.