USD/CHF has been bearish since November last year, making lower highs, as we can see that the price was rejected around the resistance zone of 0.9122 which is where the 100 SMA (green) stood on the daily chart. As a result, this pair reversed back down this month and headed towards the 0.89 level. This week we saw another retrace higher ahead of Powell’s testimony at the US Congress, which was not as hawkish as markets were fearing, sending the USD lower. The 50 SMA (yellow) acted as resistance on the daily chart, rejecting the price, so sellers were in control again.
USD/CHF Daily Chart – MAs Continue to Keep This Pair Down
USD/CHF failed at the 100 SMA earlier this month
The recent policy divergence between the Swiss National Bank (SNB) and the US Federal Reserve (FED) has contributed to the bearish price action in USD/CHF . Specifically, the FED has temporarily halted its tightening cycle, maintaining interest rates at a range of 5.00-5.25%, as it seeks further data before deciding on another rate hike. Conversely, the SNB has remained hawkish, with Governor Jordan expressing his determination to bring inflation down to target and not deviating from that goal due to the risk of second and third-round effects. Earlier today that delivered another rate hike worth 25 bps, which takes the bank rate to 1.75%.
Swiss National Bank Rate Decision
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