Swiss Franc Short-term Outlook: USD/CHF Snaps Back from Support

Swiss Franc Technical Forecast: USD/CHF Short-term Trade Levels

• USD/CHF plunges nearly 2.6% off monthly high– rebounding off multi-month support this week
• USD/CHF monthly opening-range intact heading into the Fed, U.S. GDP, Core PCE
• Resistance 9111, 9157/70, 9210/39 (key)- Support 8989-9009 (key), 8886, 8827/33

The US Dollar is attempting to snap a two-week losing streak with the USD/CHF erasing the Monday sell-off. A defense of multi-month support now shifts the focus to a breakout of the January opening-range with major event risk on tap into the close of the week. Battles lines drawn on the USD/CHF short-term technical charts.

Swiss Franc Price Chart – USD/CHF Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CHF on TradingView

Technical Outlook: In last month’s Swiss Franc Short-term Outlook we noted that USD/CHF had, “extending into uptrend resistance near the 92-handle early in the month. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to the monthly range lows IF price is heading higher on this stretch with a close above 9239 needed to fuel the next leg of the advance.”

USD/CHF reversed sharply off those highs with a break lower four days later fueling a decline of more than 2.5%. The sell-off briefly registered an intraday low at 8965 on Monday before rebounding off uptrend support with the monthly opening-range still preserved heading into the Federal Reserve interest rate decision later today. Looking for the breakout in the days ahead with a broader outlook still constructive while within the September uptrend.  

Swiss Franc Price Chart – USD/CHF 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CHF on TradingView

A closer look at Swisse price action shows USD/CHF trading within the confines of a descending pitchfork extending off the monthly high with the medina-line further highlighting near-term support here at the May low / January opening-range lows near 8989-9009. Yearly open resistance is eyed at the weekly range-highs at 9073 with near-term bearish invalidation now set to the 61.8% retracement of the monthly range at 9112- note that the upper parallel converges on this threshold into the close of the week. A topside breach above this level would expose the 2024 & 2025 high-day closes (HDC) at 9157/70 with a close above the October 2023 HDC / 50% retracement at 9239 ultimately needed to mark uptrend resumption.

 A break / close below upslope support would suggest that a more significant high was registered this month / a larger correction is underway. Subsequent support objectives rest at the 38.2% retracement of the September rally at 8886 and the June low / 200-day moving average neat 8827/33- both levels of interest for possible downside exhaustion / price inflection IF reached.

Bottom line: USD/CHF rebounded off multi-month support this week with the January opening-range preserved just below uptrend resistance. From a trading standpoint, losses would need to be limited to 8989 IF price is heading higher on this stretch with a breach close above 9111 needed to alleviate further downside pressure- ultimately, still need a breakout of the monthly opening-range / 9239 to mark uptrend resumption.

Keep in mind the FOMC rate decision is released later today with key GDP and inflation data (PCE) on tap into the close of the week. Stay nimble into the releases and watch the weekly close here for guidance. Review my latest Swiss Franc Weekly Forecast for a closer look at the longer-term USD/CHF technical trade levels.

USD/CHF Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex