USD/CHF Defends January Low to Stage Three-Day Rally

US Dollar Outlook: USD/CHF

USD/CHF appears to be defending the January low (0.8966) as it stages a three-day rally.

USD/CHF Defends January Low to Stage Three-Day Rally

USD/CHF carves a series of higher highs and lows as it extends the rebound from the monthly low (0.8973), and the exchange rate may climb back towards the monthly high (0.9197) as the Federal Open Market Committee (FOMC) Minutes reveal that ‘the current high degree of uncertainty made it appropriate for the Committee to take a careful approach in considering additional adjustments to the stance of monetary policy.’

The transcript from the January meeting suggests the Federal Reserve is in no rush to implement lower interest rates as ‘many participants noted that the Committee could hold the policy rate at a restrictive level if the economy remained strong and inflation remained elevated,’ and the central bank may stick to the sidelines at its next rate decision on March 19 amid little signs of a looming recession.

Join David Song for the Weekly Fundamental Market Outlook webinar.

In turn, waning expectations for an imminent Fed rate-cut may fuel the recent rebound in USD/CHF, but the exchange rate may no longer respond to the positive slope in the 50-Day SMA (0.9047) after closing below the moving average for the first time since October.

With that said, USD/CHF may track the January range as it extends the rebound from the monthly low (0.9028), but the recovery in the exchange rate may turn out to be temporary if fails to defend the January low (0.8966).

USD/CHF Price Chart – Daily

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

USD/CHF trades to a fresh weekly high (0.9055) as it stages a three-day rally, with a breach above the monthly high (0.9197) raising the scope for a test of the January high (0.9201).
Need a close above 0.9180 (23.6% Fibonacci extension) to bring the October 2023 high (0.9245) on the radar, but USD/CHF may struggle to extend the recent series of higher highs and lows should it struggle to hold above the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) region.
Failure to defend 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, with the next region of interest coming in around 0.8770 (61.8% Fibonacci extension) to 0.8800 (50% Fibonacci extension).

Additional Market Outlooks

AUD/USD Clears January High to Trade in Ascending Channel

US Dollar Forecast: EUR/USD Rally Stalls Ahead of January High

USD/CAD Forecast: Canadian Dollar Unfazed by CPI as Trump Tariffs Loom

Gold Price Forecast: RSI Falls Below 70 to Indicate Sell Signal

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.