US Dollar Forecast: USD/CHF Pullback Keeps January Range Intact

US Dollar Outlook: USD/CHF

USD/CHF continues to hold below the 2024 high (0.9225) as it pulls back ahead of the January high (0.9201).

US Dollar Forecast: USD/CHF Pullback Keeps January Range Intact

USD/CHF slips to a fresh weekly low (0.9049) as the US Bureau of Labor Statistics (BLS) shows job openings narrowing to 7.600M in December from 8.098M the month prior, and signs of a weakening labor market may push the Federal Reserve to further unwind its restrictive policy as the ‘median participant projects that the appropriate level of the federal funds rate will be 3.9 percent’ at the end of 2025.

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In turn, the US Dollar may face headwinds ahead of the next Fed rate decision on March 19 as the central bank pursues a neutral stance, but the update to the US Non-Farm Payrolls (NFP) report may keep the Federal Open Market Committee (FOMC) on the sidelines as the economy is anticipated to add 170K jobs in January.

US Economic Calendar

At the same time, the Unemployment Rate is expected to hold steady at 4.1% during the same period, and little signs of a recession may encourage the FOMC to adjust the forward guidance for monetary policy as Chairman Jerome Powell and Co. acknowledge that ‘inflation has eased significantly over the past two years but remains somewhat elevated relative to our 2 percent longer-run goal.’

As a result, a positive development may generate a bullish reaction in the US Dollar, but a weaker-than-expected NFP report may drag on the Greenback as it fuels speculation for lower US interest rates.

With that said, USD/CHF may continue to give back the advance from the January low (0.8966) as it snaps the recent series of higher highs and lows, but the exchange rate may track the positive slope in the 50-Day SMA (0.8996) as it still holds above the moving average.

USD/CHF Price Chart – Daily

Chart Prepared by David Song, Senior Strategist; USD/CHF Price on TradingView

USD/CHF is under pressure after failing to test the January high (0.9201), and a move below the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) region may lead to another gut check of the positive slope in the 50-Day SMA (0.8996).
Failure to hold above the January low (0.8966) may push USD/CHF towards the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone, but the pullback in USD/CHF may turn out to be temporary should it continue to hold above the moving average.
Need a move above the monthly high (0.9197) to bring the 2024 high (0.9225) back on the radar, with a breach above the October 2023 high (0.9245) opening up the 2023 high (0.9440).

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--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

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