USD/CHF Holds Above 0.8050 on Trade Optimism, Dollar Boost
USD/CHF holds above 0.8050 as the US Dollar strengthens on renewed trade optimism.
FUNDAMENTAL OVERVIEW:
USD/CHF extends its advance for a second straight session, trading near 0.8060 during Tuesday’s European session, supported by a stronger US Dollar amid growing trade optimism.
The greenback gained as the U.S. and EU finalized a trade agreement over the weekend, imposing 15% tariffs on most European goods starting August 1. Sentiment also improved on hopes that the U.S. and China will extend their fragile trade truce before the August 12 deadline. Additionally, President Trump announced plans to restart trade talks with Cambodia and Thailand following recent border tensions.
The US Dollar is further underpinned by expectations that the Federal Reserve will leave interest rates unchanged at 4.25%–4.50% in Wednesday’s meeting. Investors are focused on the FOMC’s tone for clues about potential rate cuts in September. Attention now turns to key upcoming data, including the Q2 PCE inflation report and July’s Nonfarm Payrolls, for signals on the U.S. economy’s strength.
USD/CHF finds support as the safe-haven Swiss Franc (CHF) weakens amid improved market sentiment driven by trade agreements between the US and major partners. However, further CHF downside may be limited, with traders anticipating the Swiss National Bank (SNB) to hold off on additional policy easing following June’s inflation data.
USD/CHF TECHNICAL ANALYSIS CHART:
Technical Overview:
USD/CHF is trading within an up channel.
USD/CHF is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 0.8085
Immediate support level: 0.7981
HOW TO TRADE USD/CHF
The USD/CHF pair, after a significant decline on the higher timeframe, found strong support and has since reversed impulsively higher. It has now broken above last week’s high and a long-term trendline. A pullback is anticipated after this rally; however, if USD/CHF holds above the trendline support, further upside movement is likely.
