Swiss Franc Technical Forecast: USD/CHF Falls to Yearly Support

Swiss Franc Technical Forecast: USD/CHF Weekly Trade Levels

• USD/CHF plunges into downtrend support at the yearly lows- risk for price inflection
• USD/CHF weekly momentum flirts with oversold break- U.S. Core PCE on tap
• Resistance 8103, 8206, 8406/16 (key)- Support 8040 (key), 7769, 7669

USD/CHF plunged more than 1.7% since the start of the week with price now testing support at the yearly low. The focus is on this week’s close as the bears attempt to break through downtrend support to mark fresh ten-year lows. Battle lines drawn on the USD/CHF weekly technical chart.

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, “A rebound off downtrend support has exhausted into the median-line and the immediate focus is on a breakout of the 8206-8416 range for guidance. From a trading standpoint, rallies should be limited to this week’s high IF price is heading lower this stretch with a close below 8206 needed to fuel another test of the lows.” The weekly highs held into the close of the May with USD/CHF marking a close below 8206 early in the month.

The decline has extended more than 5.2% off the May high with price now testing the April / yearly low at 8040- note that the 25% parallel of the 2023 pitchfork converges on this threshold and further highlights the technical significance of this region. A break / close below would threaten another bout of accelerated declines with subsequent support objectives eyed at the 2011 low-week close (LWC) at 7769, the 2011 low at 7669 and the 78.6% retracement the 2012 rally at 7537.

Initial weekly resistance now stands back at 8206 and is backed by the median-line, currently near 8350s. Key resistance remains at 8406/16- a region defined by the 2024 low-close, the 2023 low-week close (LWC) and the 2024 yearly open. A breach / weekly close above this threshold is needed to suggest a more significant low is in place / a larger recovery is underway towards the July 2023 lows at 8555 and the 52-week moving average near ~8667.

Bottom line: USD/CHF is testing support at the yearly lows and the short-bias may be vulnerable while above slope support. 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 (RSI sub-30) needed to fuel the next major leg of the decline.

Keep in mind Federal Reserve Chair Powell is testifying before congress for the next two-days, and we still get the release of key U.S. inflation data into the close of the week with the May Personal Consumption Expenditures on tap Friday. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest Swiss Franc Short-term Outlook for a closer look at the near-term USD/CHF technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex