Swiss Franc Short-term Outlook: USD/CHF Rebound Eyes Resistance Test

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

USD/CHF reverses sharply off technical support- rallies more than 1% off monthly low
Dollar recovery testing initial resistance within broader downtrend- U.S. CPI on tap
Resistance 7951/64, 7999-8007, 8020 (key)- Support 7911, 7859/72(key), 7829

The Swiss Franc is back under pressure, with USD/CHF rebounding more than 1% off key technical support to start the week. The recovery is now trading near the objective monthly open, raising questions over whether a more significant low may be forming. The focus is on a reaction to this stretch toward downtrend resistance, and a breakout will be needed to suggest a larger recovery is underway. Battles lines drawn on the USD/CHF short-term technical charts.

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 my last Swiss Franc Short-term Outlook we noted that, “from a trading standpoint, losses would need to be limited to 7900 IF price is heading higher on this stretch with a close above 8053 ultimately needed to suggest a larger turn is underway here.” USD/CHF registered a high-close at 8063 days later but quickly reversed course with price plunging more than 1.9% off the October highs. The decline rebounded sharply off technical support last week with a 1% rally now trading back near the objective monthly open and we are left questioning whether a more significant low is in place.

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 trading within the confines of a descending pitchfork extending off the August / October highs. Initial resistance is being tested today at the 38.2% retracement of the monthly range / the October open at 7951/64 and the immediate focus is on a reaction off this mark. Subsequent resistance is eyed at the 61.8% retracement / August low-day close (LDC) at 7999-8007 with a breach / close above the 1.618% extension of the advance at 8020 needed to suggest a more significant low is in place / a larger trend reversal is underway.

Initial support rests with the July LDC at 7911 with a break / daily close below the 2025 low-close / July low at 7859/72 needed to mark resumption of the broader downtrend. Subsequent support rests with the objective yearly low at 7829 ad the 78.8% retracement of the 2011 rally at 7779- both levels of interest for possible downside exhaustion / price inflection IF reached.

Bottom line: USD/CHF is threatening a larger recovery after rebounding off key support on Friday and the focus is on this stretch towards downtrend resistance. From a trading standpoint. Losses would need to be limited to 7859 IF price is heading higher on this stretch with a close above 8020 ultimately needed to suggest a more significant low is in place.

Keep in mind that we will be getting the release of key U.S. inflation data on Friday with the Consumer Price Index (CPI) on tap ahead of next week’s highly anticipated Fed interest rate decision. Stay nimble into the releases 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

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Active Short-term Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist

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