USD/CHF Extends Gains Above 0.8030 as Swiss Growth Slows and Dollar Strengthens
USD/CHF continued its upward momentum during the European session, rising above 0.8030 as the Swiss Franc weakened after fresh data...
Quick overview
- USD/CHF rose above 0.8030 as the Swiss Franc weakened due to a contraction in Switzerland's export-heavy economy.
- Expectations that the Swiss National Bank will maintain 0% rates in December have limited demand for the Franc.
- The US dollar remains strong, supported by reduced expectations of a Federal Reserve rate cut and upcoming key US data.
- Technical analysis shows USD/CHF testing resistance at 0.8030, with potential targets at 0.8070 and 0.8116 if broken.
USD/CHF continued its upward momentum during the European session, rising above 0.8030 as the Swiss Franc weakened after fresh data showed Switzerland’s export-heavy economy contracted for the first time in more than two years. The slowdown has narrowed the Franc’s appeal, even with its safe-haven reputation.
Expectations that the Swiss National Bank (SNB) will keep rates at 0% in December despite rising inflation have also restricted CHF demand. With growth cooling and monetary policy likely to remain unchanged, investors have shown limited appetite for the Swiss currency.
Dollar Supported by Fed Policy Expectations
The US dollar held firm near a one-week high, supported by fading expectations of another Federal Reserve rate cut in December. Market pricing suggests policymakers may prefer to keep rates on hold, giving USD/CHF an additional lift.
Concerns surrounding the longest US government shutdown have made traders more cautious, but haven flows into the dollar have prevented any meaningful downside. Investors are now looking to the upcoming FOMC minutes, which may offer clearer signals on how much policy flexibility the Fed still sees.
Key US Data Ahead
Attention is also turning to Thursday’s delayed US Nonfarm Payrolls (NFP) report for September. Signs of further cooling in the labor market could weigh on the dollar, but a stronger print may reinforce expectations that the Fed can avoid near-term easing.
A cautious risk tone may also revive interest in the Swiss Franc, potentially slowing USD/CHF’s latest climb.
USD/CHF Technical Analysis
USD/CHF is trading near 0.8017, extending its recovery inside a rising channel that has held since last week’s 0.7879 low. The pair is testing 0.8030, a resistance level that has repeatedly halted intraday momentum. A decisive break above this area would open the next targets at 0.8070 and 0.8116.
The RSI near 70 shows strong momentum but suggests the pair is nearing a zone where buyers may face resistance. The 20-EMA continues to provide steady support, reinforcing short-term upside bias.
If the pair slips below 0.7986, the lower channel boundary becomes the next area to watch, followed by 0.7939. As long as the channel structure holds, USD/CHF retains upward pressure.
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