USDCHF Rally Stalls after FED and SNB Rhetoric

USDCHF gained nearly 4 cents since bottoming at 0.84, but failed at resistance yesterday after the FED rate cut and reversed 50 pips lower. Now the price is overbought on this pair as the weekly chart below shows, which points to a retreat lower after the bearish reversal yesterday.

The USD/CHF pair has been in a gradual downtrend with lower highs over the last two years, although it’s generally traded within a range between 0.84 (support zone) and 0.92 (highest level since October 2024) over the past year. Safe-haven assets like the Swiss franc and the Japanese yen have lost some appeal recently, as reduced concerns of a broader conflict between Israel and Iran have led to a rebound from the lower end of this range in the past two months.

USD/CHF Chart Weekly – The 50 SMA Rejected the Price Yesterday

However, moving averages on the weekly chart remain a barrier to higher prices. Earlier this year, the 100 SMA (green) acted as resistance, and now the 50 SMA (yellow) is providing similar pressure. Switzerland’s economy is sluggish, partly influenced by the weaker economic outlooks in Germany and the broader Eurozone. Recent reports indicate that Swiss consumer sentiment has remained persistently negative.

Swiss National Bank (SNB) officials have signaled support for further rate cuts following the SNB’s recent 75-basis-point cut, aligning with their dovish stance. The SNB has also noted a substantial decrease in inflation projections, further raising the likelihood of additional cuts—a factor that could support USD/CHF while weakening the Swiss franc. However, the weekly chart shows that USD/CHF is overbought, as indicated by the stochastic indicator. This suggests a possible pullback toward 0.86 or 0.85 before a potential renewed push higher.

SECO Consumer Climate for October

Governing Board Member Martin Speaks

SNB Chair Schlegel on Cryptocurrencies:

• • Stated cryptocurrencies are not practical for payments.
  • Made remarks during an event in Brugg, Switzerland.
• Key Points:
  • Physical Cash: Will continue to play an important role in Switzerland’s payment system.
  • Virtual Currencies:
    • Remain a niche phenomenon and have limited adoption.
    • Exhibit strong value fluctuations, making them impractical for stable payments.
    • Consume significant energy resources.
    • Are linked to illegal activities and challenging to regulate.

USD/CHF Live Chart