Swiss Franc Short-term Outlook: USD/CHF Coils Ahead of Fed

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

• USD/CHF rebounds off downtrend support– threatens larger bear market recovery
• USD/CHF weekly / monthly opening-ranges taking shape – Fed rate decision on tap
• Resistance 8327/33, 8416/30 (key), 8484/93 - Support 8222, 8153, 8091-8103 (key)

The US Dollar rallied more than 3.6% against Swiss Franc with a rebound off technical support at multi-year lows fading over the past two-weeks. The focus shifts to a breakout of a near-term range at support with the FOMC interest rate decision on tap tomorrow. Battles lines drawn on the USD/CHF short-term technical charts.

Swiss Franc Price Chart – USD/CHF Daily

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

Technical Outlook: USD/CHF plunged more than 12.6% off the yearly highs before rebounding near confluent downtrend support last month at the 61.8% extension of the 2022 decline at 8103. The recovery extended into initial resistance at the 2023 low / 61.8% retracement of the 2011 advance at 8327/33 with the May opening-range taking shape just below. Looking for a breakout in the days ahead for guidance here.

Swiss Franc Price Chart – USD/CHF 240min

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

A closer look at Swisse price action shows USD/CHF trading within the confines of an ascending pitchfork extending off the April lows. Initial support now rests with the 38.2% retracement of the recent advance at 8222 and is backed by the 61.8% retracement at 8153. Ultimately, a break / close below key support at the low-day close (LDC) at 8091 is needed to fuel the next leg of the decline towards the 80-handle.

A topside breach / close above 8333 would keep the focus on a larger recovery towards the 2024 yearly open / low-day close (LDC) at 8416/30 and 8484/93- a region defined by the 38.2% retracement of the January decline and the 100% extension of the late-April advance. Look for a larger reaction there IF reached with a close above needed to suggest a more significant low is in place / a larger reversal is underway.

Bottom line: A rebound of technical support threatens a larger recovery within the broader USD/CHF downtrend. The immediate focus is on a breakout of the weekly opening-range here.  From a trading standpoint, the risk is weighted to the topside while within this near-term formation- rallies would need to be limited to 8493 IF price is going to ultimately resolve lower with a break below 8091 needed to mark trend resumption.

Keep in mind the Federal Reserve interest rate decision is on tap tomorrow with May opening-range just now taking shape. Stay nimble into the release and watch the weekly close here for guidance. 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