Swiss Franc Technical Forecast: USD/CHF Rally Threatens Reversal

Swiss Franc Technical Forecast: USD/CHF Weekly Trade Levels

• USD/CHF surges more than 3.5% off yearly low- FOMC rally breaks out of July range
• USD/CHF bulls look to secure close above 8100- U.S. Non-Farm Payrolls on tap into monthly cross
• Resistance 8222/45, 8300, 8380/8416 (key)- Support 8040 (key), 7946, 7882

USD/CHF ripped through the July range yesterday with the Fed-induced rally now threatening the yearly downtrend. The focus is on this week’s close with key U.S. employment data on tap into the August open. 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 testing downtrend support and that the, “immediate focus is on this week’s close with respect to 8040- keep an eye on weekly momentum with RSI currently trading just above the oversold barrier. From at trading standpoint, rallies should be limited to 8103 IF price is heading lower on this stretch with a close below trend support needed to fuel the next major leg of the decline.” Price broke lower into the close that week with USD/CHF plunging more than 4.5% off the June highs.

The decline rebounded off technical support into the July-open with the monthly range taking shape just above the 1.618% extension of the May decline at 7882. The opening range broke to the topside on the heels of yesterday’s FOMC rate decision and takes USD/CHF back above the 25% parallel- a weekly close back above the April lows at 8040 tomorrow would suggest a more significant low is in place / a larger reversal is underway. Look for initial support near 8103 today for guidance.

Initial topside resistance objectives eyed at the 1.618% extension of the monthly advance and the 61.8% retracement of the May decline at 8222/46 backed by the median line, currently near the 83-handle. Key lateral resistance stands at 8380-8416- a region defined by the 38.2% retracement of the yearly range, the 2024 low-close, the 2023 low-week close (LWC) and the 2024 yearly open (an area of interest for possible topside exhaustion / price inflection IF reached).

Support rests at the yearly LWC at 7946 with a break / close below 7881 needed to mark resumption of the broader multi-year downtrend. Subsequent support objectives seen at the 2011 LWC at 7769 and the 2011 low-close at 7669.

 

Bottom line: USD/CHF is threatening a larger reversal within the broader downtrend. From a trading standpoint, losses would need to be limited to 8040 IF price is heading higher on this stretch with weekly close above 8103 on Friday needed to keep the immediate advance viable into the August open.

Keep in mind we get the release of Non-Farm Payrolls tomorrow into the monthly cross. Stay nimble into the release and watch the weekly close / August opening-range for guidance here. Review my latest Swiss Franc Short-term Outlook for a closer look at the near-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