Buyers Drive USD/CHF Towards Key Breakout Amid Political Shifts

Market Overview

As Donald Trump edges closer to reclaiming the White House, U.S. financial markets are experiencing a fresh wave of optimism. The U.S. dollar has extended its rally, pushing U.S. equities to new four-year highs. The surge in the dollar, driven by expectations of renewed fiscal stimulus and economic policies favoring growth, has created headwinds for other major currencies and related assets, most notably the Swiss franc. Market participants are now closely watching whether the dollar can maintain this momentum, particularly against the Swiss franc, a traditional safe-haven currency.

The broader market mood remains upbeat, as investors digest the implications of Trump’s potential victory for U.S. monetary policy. A pro-growth stance from the next administration could mean stronger economic activity, keeping the dollar well-supported against its peers.

Technical Analysis

On the four-hour chart, USD/CHF has recently broken above its long-term descending trendline, signaling a potential trend reversal. The pair is currently testing the resistance at 0.87370, reflecting the buyers’ determination to move past this crucial barrier. A sustained close above 0.87370 would pave the way for further upside, with subsequent resistance levels at 0.87703, 0.88070, and finally 0.88332 in sight. The breakout from the descending trendline has given bulls new momentum, and traders will be closely monitoring the price action to see if the pair can sustain this newfound strength.

Conversely, failure to maintain momentum above 0.87370 could see selling pressure resurface, dragging the pair back to test the support at 0.87108. Should this support fail, the path would be clear for a deeper pullback towards 0.86741 and ultimately 0.86146, the latter of which marks the critical price floor that would invalidate the current bullish breakout.

Oscillator Insights

Momentum indicators align with the current bullish sentiment. The RSI remains in bullish territory, comfortably above the midpoint, suggesting continued buying interest. Similarly, the MACD has moved above its signal line, indicating building bullish momentum. However, the ongoing rally will require consistent follow-through, particularly as the price approaches key resistance levels, where buyers could face profit-taking.

Key Events to Watch

The immediate market focus lies on the U.S. presidential election outcome, as Trump gains traction in polls. Investors anticipate policy directions that could lead to more pro-business and stimulative measures, thus supporting the U.S. dollar’s strength. Switzerland, meanwhile, has no major economic events slated in the coming days, meaning the USD/CHF will largely react to U.S. macroeconomic cues and political developments.

Key Technical Levels Overview

Resistance Levels:

• Resistance 1: 0.87703
• Resistance 2: 0.88070
• Resistance 3: 0.88332

Current Price: 0.87391

Support Levels:

• Support 1: 0.87108
• Support 2: 0.86741
• Support 3: 0.86146

Conclusion

USD/CHF is attempting a breakout above its long-term descending trendline, driven by renewed optimism surrounding the U.S. political landscape. Buyers need to sustain momentum above 0.87370 to target further gains, while a failure could lead to a deeper retracement.