USD/CHF Weekly Technical Analysis: Latest Trade Levels
- USD/CHF looks to end its two-week downward trend, bouncing off trend support after the recent SNB rate cut.
- Bulls are challenging critical resistance levels, with the potential for a breakout from the December opening range in the near future.
- Resistance levels are at 8900 (key), followed by 9042/45, and 9144. Key support levels include 8783, 8734/57, and 8596.
The US Dollar appears to be on the verge of achieving its fourth consecutive daily gain against the Swiss Franc. This rally in USD/CHF has gathered momentum following a surprising rate cut from the Swiss National Bank (SNB). The bullish trend is now testing important resistance levels, with a keen eye on a potential breakout as we approach the Federal Reserve's rate decision next week.
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Technical Overview: In last month's analysis, we highlighted that USD/CHF faced resistance at a critical level. While the medium-term outlook remains positive, the immediate upward trajectory may face challenges. Key support was established at 8709, with a decisive close above 89 necessary to catalyze further gains. The pair saw a decline of nearly 2.6% from recent highs but has since given rise to a rally exceeding 1.2%, bringing it back into a crucial resistance area at the 61.8% retracement level of the November downturn, which stands at 8899. We anticipate potential price movements around this level in the coming days.
A successful move above this pivotal point could reinstate the upward trend from September, leading to further resistance targets, including the 78.6% retracement and the 2024 high-week close (HWC) at 9042/45 and the goal for the 2024 high-close at 9144. These levels could act as significant points for price exhaustion if approached.
Current support is anchored by the 38.2% retracement of the September advance, with key levels noted at 8734/57. A drop below this support may indicate that a more substantial peak was achieved last month, opening the way for a larger correction towards the 61.8% retracement at 8596, where we anticipate significant reactions if this level is reached.
Conclusion: USD/CHF has bounced off critical trend support, with the current rally testing major resistance at the 89 level. It is advisable to consider reducing long exposure or adjusting protective stops here. Should the price continue its ascent, losses should ideally remain capped at the 52-week moving average, currently around 8783, while maintaining a decisive close above 89 to support the advancement of the bullish trend.
As we draw closer to the week's end, the monthly opening-range remains intact with a significant Federal Reserve interest rate decision approaching on Wednesday. It’s prudent to remain agile ahead of the announcement and to pay close attention to the weekly close for guidance. Review my detailed Swiss Franc Short-term Forecast for additional insights into near-term USD/CHF technical levels.
Upcoming Economic Events Affecting USD/CHF
Economic Calendar Overview - Highlights of latest economic developments and forthcoming event risks.
Ongoing Technical Charts of Interest
- US Dollar Index (DXY)
- Euro (EUR/USD)
- Gold (XAU/USD)
- Japanese Yen (USD/JPY)
- Crude Oil (WTI)
- Canadian Dollar (USD/CAD)
- British Pound (GBP/USD)
- Australian Dollar (AUD/USD)
--- Analysis by Market Analysts, Technical Strategy Team
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