USD/CHF Price Targets as Buyers Maintain Control Ahead of Powell’s Speech
Market Overview
The U.S. dollar remains resilient against the Swiss franc, supported by the interest rate differential between the Federal Reserve and the Swiss National Bank (SNB). Despite short-term pressure on the U.S. Dollar Index (DXY) in early Tuesday trading, investors continue to favor USD/CHF amid a widening yield gap.
The market’s focus now shifts to key remarks from Federal Reserve Chair Jerome Powell and other Fed officials, which could provide insights into the central bank’s future monetary policy direction. With U.S. inflation data set for release on Wednesday, investors remain cautious yet committed to the dollar’s upside potential.
Technical Analysis
On the three-hour chart, USD/CHF maintains an upward trajectory, confirming bullish dominance in the short term. Buyers have successfully broken past the previous resistance level at 0.91219, signaling a potential continuation toward higher targets.
The immediate price objective now stands at 0.91297, aligned with the 127.2% Fibonacci extension of the latest corrective pullback. If bullish momentum persists, the next resistance levels at 0.91395 and 0.91504 become viable targets.
However, overbought conditions on the RSI and a flattening MACD near the zero line suggest a possible slowdown in momentum.
While the trend remains upward, a short-term retracement cannot be ruled out, making support levels crucial for trend validation. A break below 0.91110 could indicate a deeper pullback toward 0.90934, but as long as the price holds above this support, the bullish outlook remains intact.
Key Technical Levels
- Resistance: 0.91297, 0.91395, 0.91504
- Support: 0.91219, 0.91110, 0.90934
Fundamental Drivers
Federal Reserve Policy Outlook: Powell’s speech, along with statements from FOMC members Bowman and Williams, could reshape rate expectations. Markets are eagerly awaiting clarity on whether the Fed will maintain its current stance or signal a potential rate adjustment in the coming months.
Inflation Data on Wednesday: The U.S. Consumer Price Index (CPI) release will be a key driver for the dollar. A strong inflation reading could reinforce expectations for prolonged higher rates, further supporting USD/CHF.
Swiss Economic Outlook: The SNB’s cautious monetary approach contrasts with the Fed’s reluctance to ease policy too soon, maintaining a fundamental advantage for the dollar.
Conclusion
USD/CHF remains in a bullish trend, with 0.91297 as the next upside target. However, overbought technical indicators hint at a potential short-term correction before further gains. Powell’s speech and upcoming U.S. inflation data will be pivotal in determining the pair’s next directional move.
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