USD/CHF Price Forecast: 0.8040 to act as key support amid correction
The USD/CHF pair trades 0.2% lower at around 0.8085 during the European trading session on Friday, extending its correction from the 10-month high of 0.8140 posted on Wednesday. The Swiss Franc pair faces selling pressure as the US Dollar (USD) corrects further due to easing hopes of at least two interest rate hikes from the Federal Reserve (Fed) this year.
During press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges down to near 101.35.
The CME FedWatch tool shows that the odds of the Fed delivering at least two interest rate hikes this year are 41.7%, down from 50.2% seen a week ago.
Lower oil prices due to sustained progress in technical talks between the United States (US) and Iran and an improvement in energy flows through the Strait of Hormuz have anchored global inflation projections, which have forced traders to reconsider hawkish Fed prospects.
Meanwhile, the Swiss Franc (CHF) outperforms its major currency peers amid a cautious market mood. Artificial Intelligence (AI) stocks-led sell-off in global markets have triggered risk-off market sentiment. As of writing, S&P 500 futures are down 0.43% to near 7,330, reflecting a decline in investors' risk appetite.
USD/CHF technical analysis
USD/CHF trades lower at around 0.8085; however, the near-term bias is bullish as it holds above the 20-period exponential moving average (EMA), which is at 0.8007. The Relative Strength Index (RSI) at 65.37 is approaching overbought territory, hinting that upward momentum remains strong but may be prone to consolidation phases after sharp gains.
On the downside, the March 31 high at 0.8043 is the immediate support, followed by the 20-day EMA at 0.8007. Looking up, the pair could rise towards the August 1 high at 0.8172, followed by 0.8200 once it resumes its advance and break above the 10-month high of 0.8140 posted on June 24.
(The technical analysis of this story was written with the help of an AI tool.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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