USD/CHF Faces Resistance, Bearish Signals Emerge

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The Swiss Franc (CHF) holds steady against the US Dollar (USD) as Switzerland’s lower inflation outlook hints at stable interest rates, potentially reducing foreign demand for the CHF. Meanwhile, weaker US data weighs on the USD. Swiss inflation moderated in February, supporting expectations that the Swiss National Bank (SNB) will maintain current interest rates. This could dampen CHF demand from yield-seeking investors. SNB President Thomas Jordan previously voiced concerns about further CHF appreciation harming exporters.

Federal Reserve Chairman Jerome Powell’s testimony could trigger USD volatility. Recent poor US data increases the likelihood of Fed rate cuts this summer. Any hints from Powell about a timeline could weaken the USD significantly. Technically, USD/CHF confronts resistance at its falling trendline and 50-week SMA, raising the possibility of a reversal within its descending channel. Bearish divergence between the price and the MACD indicator further supports a potential pullback.

Watch for:

Break above 0.8892: Suggests continued short-term uptrend, targeting 0.9056.
Break below 0.8742: Confirms reversal, likely leading to a decline toward 0.8645.


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