Swiss Franc Technical Forecast: USD/CHF Breakout Looms

Swiss Franc Technical Forecast: USD/CHF Weekly Trade Levels

• USD/CHF poised to snap two-week losing streak- rebounds off trend support post-SNB
• USD/CHF bulls testing pivotal resistance- December opening-range breakout imminent
• Resistance 8900 (key), 9042/45, 9144- Support 8783, 8734/57 (key), 8596

The US Dollar is poised to mark a fourth consecutive daily advance against the Swiss Franc with the USD/CHF rally extending today on the heels of a larger-than-anticipated rate cut from the Swiss National Bank (SNB). The bulls are once again testing a pivotal resistance zone, and the focus is on a breakout of the monthly opening range as we head into next week’s Fed rate decision. 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 USD/CHF had reversed off confluent resistance and, “while the medium-term outlook remains constructive, the immediate advance may be vulnerable here. From a trading standpoint, losses should be limited to 8709 IF price is heading higher on this stretch with a close above 89 needed to fuel the next major leg of the advance.” Price plunged nearly 2.6% off those highs to briefly register an intraday low at 8726 last week. A rally of more than 1.2% this week takes price back into a pivotal resistance zone today at the 61.8% retracement of the November decline at 8899- looking for possible price inflection here over the next few days.

A topside breach / close above this key threshold would threaten resumption of the September uptrend towards subsequent resistance objectives at the 78.6% retracement / 2024 high-week close (HWC) at 9042/45 and the objective 2024 high-close at 9144- both levels of interest for possible topside exhaustion IF reached.

Key support now rests with the 38.2% retracement of the September advance / 2021 swing low at 8734/57- losses below this threshold would suggest a more significant high was registered last month / threaten a larger correction towards the 61.8% retracement at 8596 (look for a larger reaction there IF reached).

Bottom line: USD/CHF has rebounded off confluent uptrend support with the rally now testing a major resistance pivot into the 89-handle. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 52-week moving average (currently ~8783) IF price is heading higher on this stretch with a close above 89 needed to fuel the next leg of the advance.

Keep in mind the monthly opening-range is preserved heading into the close of the week with the Federal Reserve interest rate decision on tap Wednesday. Stay nimble into the release and watch the weekly close for guidance here. 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