Swiss Franc Forecast: USD/CHF Teeters at 10-Year Lows Before SNB

Swiss Franc Technical Forecast: USD/CHF Weekly Trade Levels

USD/CHF bears threaten support at ten-year lows as price marks bullish divergence
USD/CHF risk for downside exhaustion / price inflection- SNB rate decision / U.S. Core PCE on tap
Resistance 8040, 8103, 8229 (key) – Support 7882 (key), 7769, 7669

USD/CHF plunged nearly 4.2% off the July high with price falling to a ten-year low last week post-FOMC. The bears are attempting a seventh weekly decline and while the broader outlook remains weighted to the downside, the immediate decline may be vulnerable at these levels with the Swiss National Bank (SNB) rate decision on tap Thursday. Battle lines drawn on the USD/CHF weekly technical chart.

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Swiss Franc Price Chart – USD/CHF Weekly

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

Technical Outlook: In last month’s Swiss Franc Technical Forecast we noted that that USD/CHF was trading in a well-defined range just above support and that, “From a trading standpoint, rallies would need to be limited to 8245 IF price is heading lower on this stretch with a close below 7882 needed to mark downtrend resumption.” USD/CHF attempted to break below key support last week on the heels of the FOMC rate decision with price registering an intraweek low at 7829 before rebounding to close the week well off the lows. The bears are now poised to mark a seventh-consecutive weekly loss with weekly momentum marking bullish divergence into these lows and the risk remains for possible price inflection here in the days ahead.

Weekly support remains with the 1.618% extension of the May decline at 7882 and a break / weekly close below this threshold is still needed to mark resumption of the broader downtrend. Subsequent support objectives rest at the 2011 low-week close (LWC) at 7769 and the 2011 low-close at 7669. The next major technical consideration rests with the 78.6% retracement of the broader 2012 advance at 7573- look for a larger reaction there IF reached.

Initial weekly resistance is eyed with the July high-week close (HWC) / April low at 8040 and is backed by the 61.8% extension of the 2022 decline at 8103. Broader bearish invalidation is now lowered to the 61.8% retracement of he May decline at 8229- note that the median-line converges on this threshold over the next few weeks and a breach / close above would be needed to suggest a more sigfniicant low is in place / a larger trend reversal is underway.

Bottom line: USD/CHF is trading just above support at ten-year lows with a seven-week losing streak marking bullish momentum divergence. From a trading standpoint, a good region to reduce portions of short-exposure / lower protective stops- rallies should be limited to 8040 IF price is heading lower on this stretch with a close below 7882 needed to fuel the next major leg of the decline.

Keep in mind the SNB rate decision is on Thursday with key US inflation data (Core PCE) on tap Friday. Stay nimble into the releases and watch the weekly close here for guidance. I’ll publish an updated Swiss Franc Short-term Outlook once we get further clarity on the near-term USD/CHF technical trade levels.

USD/CHF Key Economic Data Releases

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--- Written by Michael Boutros, Sr Technical Strategist

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