USD/CHF Bearish Momentum Builds Ahead of U.S. PMI Reports
Market Overview
On Monday, the U.S. dollar remained near its three-week high against major currencies, reflecting sustained strength ahead of pivotal central bank meetings this week. The Federal Reserve is widely expected to lower interest rates, though it is likely to emphasize a cautious and gradual path for further cuts throughout 2025. Against this backdrop, the Swiss franc has faced renewed selling pressure, driven by Switzerland’s declining producer inflation and a robust dollar outlook.
Technical Analysis
On the hourly chart, USD/CHF has embarked on a short-term correction following a pullback from the neckline of a double-top pattern. This bearish setup has propelled sellers to their immediate target at 0.89028, positioning the pair for a move toward the next support level at 0.88972. A confirmed break below this key threshold could intensify the downside momentum, driving prices beneath the 100-hour moving average at 0.88866.
Oscillators Confirmations
Momentum indicators confirm the prevailing bearish sentiment. The RSI remains in a downward trajectory, signaling sustained selling pressure. Meanwhile, the MACD reinforces this view, with its histogram deepening in the negative zone.
Alternative Scenario
If buyers regain control, they must decisively clear the resistance at 0.89143 to invalidate the bearish structure. A break above this level would open the door to a test of the key resistance at 0.89420.
Key Levels
- Resistance Levels: 0.89028, 0.89143, 0.89420
- Support Levels: 0.88972, 0.88866
Key Events to Watch
Investor attention remains fixated on the U.S. PMI data, scheduled for release later on Monday. Expectations suggest a slight decline in both the services and manufacturing indices compared to the prior month. However, the services PMI is anticipated to remain robust, printing above 55. On Tuesday, retail sales and industrial production data will provide further insight into economic performance, while Wednesday’s Federal Reserve meeting is set to conclude the year’s monetary policy trajectory with a widely expected 25-basis-point rate cut. These events will be pivotal in shaping market sentiment for the dollar and its major counterparts.
Conclusion
USD/CHF continues to exhibit bearish tendencies, with sellers targeting key support levels. A breach of 0.88972 could accelerate declines, while a reversal above 0.89143 would challenge the prevailing downtrend. The upcoming PMI and Federal Reserve decisions will likely determine the pair’s near-term trajectory.
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