The US dollar continues to be supported by strong economic data, such as the recent US PMIs and Consumer Confidence report. This data helps keep interest rate expectations stable and supports risk sentiment, which could pose a challenge for the greenback. On the other hand, the Swiss Franc weakened after the SNB cut interest rates by 25 bps to 1.25%, as the market had already priced in this move. The central bank also lowered its inflation forecasts, further contributing to the Swiss Franc’s weakness.
In terms of technical analysis, on the daily chart for USDCHF, the pair is approaching a key resistance level around the 0.90 handle. Sellers may step in at this level with a defined risk above it, positioning for a potential drop to new lows. Buyers, on the other hand, will be looking for a breakout above this level to increase bullish bets.
Looking at the 4-hour chart, the 50% Fibonacci retracement level adds confluence to the resistance level. An upside breakout could target the trendline around the 0.9050 level, where sellers may come in to push the pair lower.
On the 1-hour chart, a pullback could see buyers leaning on the support zone around 0.8945 to position for a breakout with a favorable risk-to-reward setup. Sellers will be looking for a breakdown below this level to increase bearish bets.
Upcoming catalysts for the market include the latest US Jobless Claims figures today, and the US PCE report tomorrow. These reports could impact the direction of USDCHF trading in the short term.
Overall, the technical analysis for USDCHF suggests a potential turning point at the key resistance level of 0.90, with traders keeping a close eye on upcoming economic data releases for further guidance in their trading decisions.