USD/CHF Nears 0.8200 After SNB Cuts Rate by 25 Points
USD/CHF holds near 0.8200 as SNB delivers a 25-basis point rate cut
FUNDAMENTAL OVERVIEW:
USD/CHF extends its winning streak for a fifth straight session, trading near 0.8200 during Thursday’s European hours, supported by the Swiss National Bank’s (SNB) latest policy move.
The Swiss Franc (CHF) remains under pressure after the SNB delivered a widely expected 25 basis point rate cut, lowering the benchmark Sight Deposit Rate to 0.00%. While the decision weighed on the CHF, losses were somewhat limited as markets had partially anticipated a larger, 50 basis point cut. SNB officials left the door open for negative rates but emphasized that such measures remain a last resort.
Adding to the CHF’s weakness, Switzerland’s trade surplus narrowed sharply to CHF 2.0 billion in May—its lowest level since December 2023—down from a revised CHF 5.4 billion in April, driven by a 13.6% drop in exports to CHF 21.0 billion.
USD/CHF gains as the US Dollar finds support amid heightened caution driven by escalating Israel-Iran tensions. Bloomberg reported Thursday that U.S. officials are preparing for a potential strike on Iran in the coming days, with plans still evolving. The Wall Street Journal added that President Trump approved attack plans on Tuesday but held off, awaiting Iran’s stance on its nuclear program.
USD/CHF TECHNICAL ANALYSIS CHART:
Technical Overview:
USD/CHF is trading within a down 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 Neutral trend.
Immediate Resistance level: 0.8199
Immediate support level: 0.8163
HOW TO TRADE USD/CHF
After a sustained downward move, USD/CHF found support and rebounded, briefly breaking through a key resistance zone. However, the pair failed to sustain the breakout and sharply reversed, breaking below critical support. Currently, it’s attempting another upward move but is facing rejection at the resistance level, where a bearish engulfing pattern has formed. If the immediate support is breached, further downside may follow.