USD/CHF Pullback Faces Positive Slope in 50-Day SMA

US Dollar Outlook: USD/CHF

USD/CHF appears to be pulling back ahead of the July high (0.9051) as the Relative Strength Index (RSI) continues to move away from overbought territory, but the exchange rate may defend the rally following the US election should it track the positive slope in the 50-Day SMA (0.8692).

USD/CHF Pullback Faces Positive Slope in 50-Day SMA

Keep in mind, the USD/CHF rally from last month pushed the RSI above 70 for the first time since April, and the recent weakness in the exchange rate may turn out to be temporary as the US Job Openings and Labor Turnover Survey (JOLTS) prints at 7.744M in October versus forecasts for a 7.480M reading.

Join David Song for the Weekly Fundamental Market Outlook webinar.

David provides a market overview and takes questions in real-time. Register Here

Signs of a resilient labor market may push the Federal Reserve to the sidelines as the economy shows little indications of a looming recession, and the central bank may keep US interest rates on hold at its last meeting for 2024 as Chairman Jerome Powell and Co. insist that ‘it would likely be appropriate to move gradually toward a more neutral stance of policy over time.’

US Economic Calendar

In turn, waning expectations for a Fed rate-cut in December may keep USD/CHF afloat, and the Non-Farm Payrolls (NFP) report may also influence foreign exchange markets as the update is anticipated to show the US economy adding 200K jobs in November.

With that said, USD/CHF may stage further attempts to test the July high (0.9051) should it track the positive slope in the 50-Day SMA (0.8692), but the exchange rate may give back the rally following the US election if it fails to hold above the moving average.

USD/CHF Price Chart – Daily

Chart Prepared by David Song, Strategist; USD/CHF Price on TradingView

USD/CHF pares the advance from the start of the week as it struggles to trade back above the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone, with a break/close below the 0.8770 (61.8% Fibonacci extension) to 0.8800 (50% Fibonacci extension) region raising the scope for a move towards 0.8700 (61.8% Fibonacci extension).
Next area of interest comes in around the November low (0.8615), but USD/CHF may extend the advance from the start of the month as it holds above the 0.8770 (61.8% Fibonacci extension) to 0.8800 (50% Fibonacci extension) region.
Need a close above the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone to bring the November high (0.8958) on the radar, with a break/close above the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) region opening up the July high (0.9051).

Additional Market Outlooks

USD/CAD Defends Post-US Election Rally to Eye November High

US Dollar Forecast: USD/JPY Gives Back Post-US Election Rally

US Dollar Forecast: GBP/USD Still Vulnerable to Test of May Low

NZD/USD Rebounds Ahead of 2023 Low with RBNZ Expected to Cut

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.

This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.