USD/CHF's Surge: Swiss Franc Under Pressure
The USD/CHF pair reached a high of 0.9225 two days ago, marking its highest level since March 22, 2023, before retracing and declining today to trade around 0.9100.
However, it appears that the positive momentum for the US dollar against the Swiss franc will persist in the near future. This is especially evident given the continued strength of the US dollar against most major foreign currencies. The US dollar index (DXY) recorded 106.83 points two days ago, its highest level since November 30, 2022. Additionally, the Swiss National Bank decided to maintain interest rates at 1.75% last week, despite market expectations of a 25 basis point rate hike. This decision had a negative impact on the Swiss currency.
It's worth noting that the Swiss franc has been on its longest losing streak against the G10 currencies since 1975.
From a technical standpoint, the Positive Movement Index (DMI+) in blue is registering approximately 31 points, compared to the Negative Movement Index (DMI-) in orange, which is at around 12 points. The significant gap between these two indicators indicates strong buying pressure on the US dollar against the Swiss franc. Moreover, the ADX trend strength index in green stands at about 38 points, exceeding the 25-point threshold, suggesting a strong upward momentum in this trend.
Regarding the MACD indicator in blue, it remains above the SIGNAL LINE in orange and is in positive territory, which augments the positive momentum for the US dollar against the Swiss franc.
Furthermore, today, the USD/CHF pair breached the pivot point of 0.9171, as well as the support levels of 0.9124 and 0.9099. It now has the potential to test the third support level at 0.9052. In the event it surpasses the pivot point, it may challenge resistance levels at 0.9196, 0.9243, and 0.9268.
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Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
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