USD/CHF Technical Analysis: Key Support at 0.8560 Holds Firm
USD/CHF remains close to the key support level at 0.8560
FUNDAMENTAL OVERVIEW:
- USD/CHF holds steady near 0.8560.
- Strong US employment figures and hotter-than-expected September inflation have eliminated the possibility of a 50 basis point rate cut by the Fed.
- Meanwhile, the Swiss National Bank (SNB) is anticipated to implement further rate cuts later this year.
The USD/CHF pair hovers near the immediate support level of 0.8560 during Friday’s European session. Despite the US Dollar (USD) showing a muted performance, the Swiss Franc edges slightly higher. The US Dollar Index (DXY), which measures the Greenback’s value against six major currencies, dips marginally but stays near an eight-week high, around 103.00.
The US Dollar’s outlook remains strong, with traders anticipating a gradual 25 basis point (bps) interest rate cut by the Federal Reserve (Fed) in the November policy meeting, according to the CME FedWatch tool.
Recently, market participants were expecting the Federal Reserve (Fed) to implement another 50-basis-point rate cut next month, similar to September. However, these expectations have diminished following stronger-than-expected U.S. job data and a hotter-than-anticipated Consumer Price Index (CPI) report for September.
In Switzerland, the Swiss National Bank (SNB) is anticipated to reduce interest rates further this year. With inflation relatively low and the potential for faster economic growth, the outlook leans toward a lower policy rate for the Swiss economy.
An increased likelihood of additional rate cuts from the Swiss National Bank (SNB) would put pressure on the Swiss Franc (CHF), keeping it on the defensive.
USD/CHF TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
USD/CHF is currently trading within a up channel.
USD/CHF is positioned above 20&50 Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying zone, while the Stochastic oscillator suggests Neutral trend.
Immediate Resistance level: 0.8585
Immediate support level: 0.8542
HOW TO TRADE USD/CHF
Following a downward trend, USD/CHF has entered a consolidation phase. A breakout from this range, coupled with a retest of support, suggests potential upside. The current upper range acts as immediate resistance. If breached, further gains toward the next resistance level are possible.