USD/CHF outlook: pivotal 20‑day SMA test as the robust franc outshines

crypthub

about 2 hours ago

Technical Overview

The USD/CHF pair trades near 0.8950, just above the 20‑day SMA, a key short‑term trend marker. A break below 0.8940 would confirm franc strength, targeting 0.8850 support, while holding above suggests a move toward 0.9020‑0.9080 resistance. Recent price action shows a 1.8% drop from the monthly high of 0.9120, with volume up 22%. RSI sits at 42 and MACD shows bearish momentum, creating mixed signals.

Fundamental Drivers

The Swiss National Bank’s cautious stance, low inflation (1.2%) and strong trade surplus bolster the franc, reinforced by its safe‑haven appeal amid geopolitical tension. In contrast, the Federal Reserve faces internal debate, and mixed US data (CPI 3.1% up, retail sales down 0.4%) fuels dollar volatility. This policy divergence allows the CHF to outpace the USD.

Market Sentiment and Trading Implications

Commitment‑of‑Traders data shows commercial long franc positions up 18%, while speculators remain net short, hinting at possible short‑cover rallies. Surveyed strategists (62%) expect moderate franc strength through Q2 2025. Traders should watch the 0.8940 level, use wider stops for the expanded 85‑pip ATR, and adjust size according to heightened volatility.