USDCHF Technical Analysis – The Fed holds while the SNB cuts

Fundamental Overview

The USD finally got a bit of a boost after the FOMC decision despite the central bank maintaining the status quo. In fact, the Fed kept rates steady, reduced the QT pace, revised growth lower and inflation higher, and kept the dot plot mostly unchanged.

Fed Chair Powell acknowledged the current uncertainty around Trump’s policies and the inflation outlook but confirmed that the economy remains healthy, and the Fed is in a good position to wait for more clarity.

The data remains in focus. The next key event is scheduled for Monday when we get the US Flash PMIs which coupled with the UMich inflation expectations triggered the growth scare last month.

On the CHF side, the SNB cut interest rates by 25 bps as expected bringing the policy rate to 0.25%. There was no signal of the end of the easing cycle but the central bank is now in a good position to just pause for a long time with no need to go back to ZIRP or even NIRP. The market doesn’t see any more rate cuts.

USDCHF Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDCHF bounced once again around the recent lows and a pullback into the major trendline now looks more likely. From a risk management perspective, the sellers will have a better risk to reward setup around the trendline to position for the break below the 0.8727 level and target the 0.86 handle next. The buyers, on the other hand, will want to see the price breaking higher to start targeting the 0.90 handle.

USDCHF Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we are now stuck in a 100-pips range between the 0.8760 support and the 0.8860 resistance. The sellers will likely step in around the resistance and the trendline to position for a drop into new lows, while the buyers will want to see the price breaking higher to regain control and push into the 0.90 handle next.

USDCHF Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor support zone around the 0.8805 level. We can expect the buyers to step in again with a defined risk below the support to position for a rally into the major trendline with a better risk to reward setup. The sellers, on the other hand, will look for a break lower to target the break below the 0.8760 support next. The red lines define the average daily range for today.