US Dollar Forecast: USD/CHF Pulls Back Ahead of 2024 High

US Dollar Outlook: USD/CHF

USD/CHF starts to carve a series of lower highs and lows after failing to test the 2024 high (0.9225), and the exchange rate may continue to give back the advance from the December low (0.8736) as the Relative Strength Index (RSI) falls back from overbought territory.

US Dollar Forecast: USD/CHF Pulls Back Ahead of 2024 High

The move below 70 in the RSI is likely to be accompanied by a further decline in USD/CHF like the price action from last year, but the pullback in the exchange rate may turn out to be temporary should it continue to track the positive slope in the 50-Day SMA (0.8858).

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In turn, USD/CHF may reflect a bullish trend as long as it holds above the moving average, and speculation surrounding US monetary policy may influence the exchange rate as Federal Reserve Governor Lisa Cook acknowledges that ‘the labor market has been somewhat more resilient, while inflation has been stickier than I assumed’ while speaking at the University of Michigan.

As a result, Governor Cook goes onto say that the central bank ‘can afford to proceed more cautiously with further cuts,’ and the Federal Open Market Committee (FOMC) may further adjust its forward guidance in 2025 as the US economy shows little signs of a looming recession.

With that said, the opening range for January is in focus for USD/CHF as it starts to carve a bearish price series, but the exchange rate may stage further attempts to test the 2024 high (0.9225) should it continue to hold above the 50-Day SMA (0.8858).

USD/CHF Price Chart – Daily

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

• USD/CHF appears to be reversing ahead of the 2024 high (0.9225) as it continues to pullback from the monthly high (0.9138), with a close below the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) region bringing the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone on the radar.
• Next area of interest comes in around 0.8770 (61.8% Fibonacci extension) to 0.8800 (50% Fibonacci extension), but USD/CHF may stage further attempts to test the 2024 high (0.9225) if it struggles to close below the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) region.
• A breach above the 2024 high (0.9225) may lead to a test of the October 2023 high (0.9245), with the next area of interest coming in around the 2023 high (0.9440).

Additional Market Outlooks

EUR/USD Halts Three-Day Selloff to Keep RSI Out of Oversold Territory

USD/CAD Rebound Pushes RSI Back Towards Overbought Zone

British Pound Forecast: GBP/USD Pushes Below May Low to Eye 2024 Low

AUD/USD Vulnerable to Change in RBA Policy

--- Written by David Song, Senior Strategist

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