Current trend

The USD/CHF pair is declining within the long-term downtrend: this week, the price tested the 0.8422 mark (Murrey level [1/8]) but cannot consolidate below it yet.

The US currency is under pressure amid expectations of the imminent start of interest rate cuts by the US Federal Reserve. Last Friday, the head of the regulator, Jerome Powell, said that the time had already come for a correction in monetary policy, since the risks of higher inflation had decreased, and the risks of lower employment levels, on the contrary, had increased. Thus, the September reduction in the cost of borrowing in the American economy no longer causes investors doubts, although its size has not yet been determined: in the event of a significant increase in unemployment in August, officials can start with a correction of ˗50 basis points immediately, and if the indicator turns out to be stable, they will limit themselves to only ˗25 basis points. Most market participants expect a threefold interest rate cut this year, which means that in the medium term, pressure on the dollar will continue.

Unlike the US Federal Reserve, the Swiss National Bank has already stabilized the inflation rate, which has been in the target range of 0.0–2.0% for more than a year, and in March began lowering the key rate, which has since been adjusted twice. It now stands at 1.25% and is likely to continue to gradually decline to negative levels, as it was before the last economic crisis. Thus, the franc's position is currently seen as more stable than the American currency.

The publication of gross domestic product (GDP) data is also expected today US dollars for the second quarter: according to forecasts, the indicator will grow by 2.8%, which may lead to a short-term corrective growth of the USD/CHF pair, but it is unlikely to lead to a change in the current downtrend.

Support and resistance

The asset is testing the 0.8422 mark (Murrey level [1/8]), consolidation below which will lead to a continued decline in quotes towards the targets of 0.8300 (Murrey level [0/8]) and 0.8178 (Murrey level [1/8]). If the level of 0.8544 (Murrey level [2/8]), supported by the central line of Bollinger Bands, is broken out, the upward dynamics will be able to continue to 0.8789 (Murrey level [4/8]) and 0.8911 (Murrey level [5/8]), but this scenario seems less likely.

Technical indicators confirm the continuation of the downtrend: Bollinger Bands are pointing downwards, MACD is increasing in the negative zone, and Stochastic is horizontal in the oversold zone.

Resistance levels: 0.8544, 0.8789, 0.8911.

Support levels: 0.8422, 0.8300, 0.8178.

Trading tips

Short positions should be opened below 0.8422 with targets of 0.8300, 0.8178 and a stop-loss around 0.8510. Implementation period: 5–7 days.

Long positions can be opened above the 0.8544 mark with targets of 0.8789, 0.8911 and a stop-loss around 0.8450.