USD/CHF Targets at 13-Year Lows

Fundamental Outlook

In recent weeks, the USD/CHF pair has been significantly influenced by notable fundamental developments. The U.S. Dollar Index (DXY) has fallen to a three-year low around 98.32, driven by market concerns over the Federal Reserve’s independence and escalating trade tensions. Repeated criticisms from President Trump directed at Federal Reserve Chair Jerome Powell, alongside his calls for immediate interest rate cuts, have eroded investor confidence in U.S. monetary policy.

On the other side, the Swiss Franc has strengthened as a safe-haven asset amid heightened market volatility. This surge in demand has pushed USD/CHF to levels last seen in September 2011. However, the Swiss National Bank (SNB), concerned about excessive appreciation of the franc, is reportedly considering a rate cut to mitigate its negative impact on exports and economic growth.

Overall, the weakening U.S. dollar, due to both political and economic uncertainties, combined with the strengthening Swiss Franc as a safe haven, has exerted downward pressure on USD/CHF. Unless effective policy actions are taken by either the Federal Reserve or the SNB, this downward trend could persist.

Technical Analysis

On the one-hour chart, USD/CHF has entered a corrective phase following a significant downtrend and is currently trading around 0.8090. The broader market trend remains bearish, as the price continues to hold below the Weighted Moving Average (WMA) at 0.8124, which maintains a downward slope. Buyers have so far failed to reclaim this level, reinforcing bearish sentiment.

The Fibonacci retracement tool indicates that after bouncing from the 61.8% retracement level at 0.8085, the price encountered resistance at 0.8116—a key level coinciding with the previous swing high and the 0% Fibonacci level. The inability to break above this critical resistance level strengthens the likelihood of continued downside movement. If the 0.8085 support level is broken again, the next bearish targets lie at 0.8066 and 0.8052, based on Fibonacci extension levels.

Bollinger Bands reveal that the market has recently entered a phase of wider price fluctuations, suggesting heightened volatility. Currently, the price is gravitating toward the lower Bollinger Band, which may indicate short-term selling pressure.

Looking at the indicators, the Relative Strength Index (RSI) hovers around 49, oscillating in neutral territory, signaling a balance between buyers and sellers. However, the RSI’s downward slope in recent sessions points to weakening buying momentum. Additionally, the MACD remains close to the zero line, with the MACD line below the signal line and the histogram in negative territory—further confirming the weak bullish momentum and suggesting potential for continued selling pressure. The narrow gap between the MACD and signal lines also suggests that the market is at a decision point.

Overall, as long as the price remains below the 0.8116 resistance level and the 0.8124 WMA, the short-term outlook for USD/CHF remains bearish. A confirmed break below the 0.8085 support level could pave the way toward 0.8066 and 0.8052. Conversely, a breakout above 0.8116 and sustained movement above the WMA could signal the start of a bullish reversal.

Key Upcoming Economic Events

🇺🇸 United States – Major Events:

• Wednesday, April 23: Release of New Home Sales data and speeches from key Federal Reserve officials, including Christopher Waller and Neel Kashkari. These events could influence market expectations surrounding U.S. monetary policy.
• Thursday, April 24: Publication of Durable Goods Orders and Initial Jobless Claims. These indicators reflect the health of the U.S. economy and could affect the dollar’s value.
• Friday, April 25: Release of the University of Michigan Consumer Sentiment Index. A decline in this index may signal consumer concerns over the economic outlook.

🇨🇭 Switzerland – Major Events:

• Wednesday, April 30: Release of the KOF Economic Barometer for April, providing insights into Switzerland’s economic outlook.
• Thursday, May 1: Publication of Manufacturing PMI data. A decline in this indicator may suggest weaker activity in the manufacturing sector.
• Friday, May 2: Release of Retail Sales data for March, offering a view into consumer behavior and domestic economic conditions.
• Monday, May 5: Publication of the Consumer Price Index (CPI) for April. Changes in this indicator could influence inflation expectations and SNB’s monetary policy stance.

Given these scheduled events, traders should closely monitor the economic data releases, as any significant deviation from forecasts could trigger notable volatility in the USD/CHF pair.

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