Swiss Franc Short-term Outlook: USD/CHF Rally Presses Yearly Trend Resistance

Swiss Franc Technical Forecast: USD/CHF Short-term Trade Levels

• USD/CHF has rallied to fresh yearly highs after breaking out of the July opening-range
• The rally is now approaching the upper bounds of the yearly uptrend at a major technical hurdle- inflection risk rises
• A sustained breakout is needed to signal the next leg higher while failure at current levels would increase the risk of a larger pullback within the prevailing uptrend.
• Next week's FOMC decision and U.S. inflation data could provide the catalyst for the next directional move.
• Resistance 8100/25 (key), 8200/15, 8333- Support 8041, 8009 (key), 7910/27

USD/CHF is attempting to register a fifth consecutive daily advance after rebounding sharply from the July opening-range low, carrying the pair towards a major technical inflection zone. The rally is pressing the upper bounds of the yearly uptrend, where multiple resistance studies converge and the risk of a larger reaction increase. A decisive close above this barrier would strengthen the broader bullish outlook and pave the way for next major leg of the rally, while rejection would keep the focus on a  potential pullback within the late-May uptrend. Battles lines drawn on the USD/CHF short-term technical charts ahead of next week's FOMC decision.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this USD/CHF setup and more. Join live on Monday’s at 8:30am EST.

Swiss Franc Price Chart – USD/CHF Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CHF on TradingView

Technical Outlook: In last month’s Swiss Franc Short-term Outlook we noted that USD/CHF was, “testing confluent uptrend resistance and while the outlook remains constructive, the immediate focus is on a reaction off this mark into the close of the week. From a trading standpoint, losses would need to be limited to 8041 IF price is heading higher on this stretch with a close above the upper parallel needed to fuel the next major leg of the rally.” USD/CHF pulled back nearly 1.6% off those highs in the following days with price briefly registering an intraday low at 8010 into the July open before rebounding.

The recovery has now broken the monthly opening range with USD/CHF poised to mark a fifth consecutive daily advance on Friday. The rally is now approaching a major technical hurdle just higher, and the risk rises for possible price inflection into the upper bounds of the yearly uptrend.

Swiss Franc Price Chart – USD/CHF 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CHF on TradingView

Notes: A closer look at Swisse price action shows USD/CHF continuing to trade within the confines of the ascending pitchfork we have been tracking off the late-May low. The 75% parallel now converges on key lateral resistance at the 100% extension of the January advance and the 38.2% retracement of the 2025 decline at 8200/15. Look for a larger reaction there IF reached with a topside breach / daily close above needed to fuel the next major leg of the advance. Subsequent resistance objectives are eyed at the upper parallel (currently near ~8280s) and the 2023 swing low at 8333.

Initial support rests with the monthly opening range high at 8152 and is backed by the 8100/25 pivot zone. This region is defined by the November high-day close (HDC), the 61.8% extension of the 2022 decline, the August high close and the November swing high. Near-term bullish invalidation is now raised to the objective monthly open at 8083- losses below this threshold would suggest a more significant high is in place with a break of the January high at 8041 needed to put the bears back in control.

Bottom line: USD/CHF has broken to fresh yearly highs with the rally now approaching major technical resistance at the upper bounds of the yearly uptrend. From a trading standpoint, look to reduce long-exposure / raise protective stops on a stretch towards the 82-handle- losses would need to be limited to 8083 IF price is heading higher on this stretch with a close above the upper parallel (on the daily chart) needed to fuel the next major leg of the rally.

Keep in mind that the FOMC rate decision is on tap Wednesday, followed by the release of the June Core Personal Consumption Expenditures (PCE) report on Thursday. As the Fed's preferred measure of underlying inflation, the PCE data will be closely scrutinized for signs that rising energy prices are beginning to filter through to broader price pressures. A stronger-than-expected reading would reinforce the case for additional policy tightening later this year, providing further support for the U.S. dollar. Fed funds futures are currently pricing a 64% probability the Fed leaves rates unchanged next week, while assigning an 80% chance of a 25-basis-point rate hike at the September meeting. Stay nimble into the release and watch the weekly closes for guidance here. Review my latest Swiss Franc Weekly Forecast for a closer look at the longer-term USD/CHF technical trade levels.

USD/CHF Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex