USD/CHF: Expect Further Growth

Published 12/12/2024, 02:14 PM

So the Swiss National Bank cut its base deposit rate by 50 basis points today, from 1.00% to 0.50%, surprising the markets, which had expected a 0.25% cut.

The accompanying statement from the Central Bank said that the bank's management "will continue to closely monitor the situation and, if necessary, adjust monetary policy to ensure that inflation remains within a range consistent with price stability in the medium term." "The outlook for Switzerland, as for the global economy, is subject to considerable uncertainty," and the main risk is "developments abroad," the statement also noted.

At the same time, the SNB's management did not rule out further policy easing and intervention in foreign exchange trading in order to lower the franc. It is known to be a traditional safe-haven asset and is in demand in such situations of uncertainty.

Having received a negative impulse from the results of the SNB meeting that ended on Thursday, the franc continues to weaken, and the USD/CHF pair continues to grow.

Overall, above the key support levels of 0.8767 (200-period moving average and the lower line of the ascending channel on the daily chart), 0.8745 USD/CHF is trading in the medium-term bull market zone, which makes long positions relevant in the medium term, we noted in our fundamental analysis today and suggested that “after a confirmed breakout of 0.8885, 0.8900, further growth should be expected.”

Our assumption remains valid - we expect further growth. Growth targets are resistance levels of 0.8955, 0.9000, 0.9024 (Fibonacci level of 38.2% correction in the wave of decline from 1.0145 to the minimum of the wave at 0.8330, reached in December 2023, and the upper border of the ascending channel on the daily chart), 0.9075, 0.9100.

In an alternative scenario, the price will fall into the medium-term bearish market zone located below the support levels of 0.8767, 0.8745, which will return the relevance of short positions to the USD/CHF pair.

The first signal here could be a breakout of support levels of 0.8885, 0.8853 (EMA200 on the 15-minute chart).
USDCHF-D

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.