As markets await the release of Canada’s Core Retail Sales data—a key event that could stir volatility in CAD pairs—USDCHF continues to draw attention following a prolonged downtrend. Recent price action suggests a potential turning point, but technical and macroeconomic forces remain at odds. While the pair eyes a breakout above a key resistance level, bearish signals persist across multiple indicators. Meanwhile, diverging central bank stances—marked by the Swiss National Bank’s fifth consecutive rate cut and the U.S. Federal Reserve’s cautious pause—add another layer of complexity to the outlook, keeping traders on alert for directional confirmation.
The USDCHF pair has remained under consistent downward pressure for two consecutive months, characterized by a pattern of lower highs and lower lows, driven by both technical and macroeconomic influences. After reaching a recent low of 0.87546 on March 20, the pair is now approaching a key short-term resistance level near 0.88628. A confirmed break above this swing high would mark a potential reversal and suggest the formation of a new bullish trend.
However, technical indicators continue to favor the bearish case. Price action remains below both the 20- and 50-period Exponential Moving Averages, underscoring ongoing downside momentum. The Momentum Oscillator also remains below the 100 threshold, indicating the absence of bullish conviction, while the Relative Strength Index (RSI) remains below the neutral 50 mark, highlighting persistent selling pressure and limited demand.
Key Resistance Levels
Should the bulls take market control, traders may direct their attention toward the four potential resistance levels below:
0.88628: The initial resistance level is set at 0.88628, which mirrors the peak marked March 14.
0.89111: The second price target is identified at 0.89111, representing the trough formed on February 25.
0.89919: The third price objective is set at 0.89919, which aligns with the weekly resistance level R3, calculated using the standard Pivot Points methodology.
0.90535: An additional price target is established at 0.90535, representing the peak marked February 19.
Key Support Levels
Should the bears maintain market control, traders may consider the four potential support levels listed below:
0.88216: The initial support level is seen at 0.88216, corresponding to the weekly Pivot Point, PP, calculated using the standard methodology.
0.87546: The second support level is estimated at 0.87546, representing the swing low marked Marched 20.
0.87158: The third support level is identified at 0.87158, reflecting the weekly support, S2, estimated using the standard Pivot Points methodology.
0.85858: An additional downside target is 0.85858, mirroring the 261.8% Fibonacci Extension drawn from 0.87550 to 0.88628.
Fundamentals
The Swiss National Bank (SNB) cut its policy rate by 25 basis points to 0.25% on Thursday—its fifth consecutive cut since March 2024—citing subdued inflation and rising global uncertainty, particularly linked to U.S. President Trump’s trade policies. While the move was in line with market expectations, SNB Chairman Martin Schlegel noted that uncertainty had risen “significantly,” especially around tariffs and global growth. The franc weakened slightly following the decision. Analysts believe this could mark the end of the SNB’s rate-cutting cycle, with inflation risks still skewed to the downside. The SNB also reaffirmed its readiness to intervene in currency markets if necessary.
On the other hand, the Federal Reserve kept interest rates unchanged at 4.25%–4.50% on March 19, citing “unusually elevated” uncertainty stemming from President Trump’s early policy moves, particularly sweeping import tariffs. Fed Chair Jerome Powell warned that these actions risk slowing economic growth while temporarily lifting inflation. Despite projecting two rate cuts later in the year, the Fed downgraded its 2025 growth forecast to 1.7% and raised its inflation outlook to 2.7%. Trump criticized the Fed’s stance, urging immediate cuts. Powell emphasized the Fed’s wait-and-see approach amid shifting economic signals, noting that the central bank is prepared to respond as needed.
Conclusion
In conclusion, USDCHF remains at a technical and fundamental crossroads. While recent price action hints at a possible trend reversal, prevailing bearish indicators continue to dominate the chart. With central banks moving in opposite directions—Switzerland easing policy amid subdued inflation and the U.S. Federal Reserve holding steady amid elevated uncertainty—market sentiment remains fragile. As traders await further clarity from upcoming economic data, including Canada’s Core Retail Sales, the pair’s direction will likely hinge on whether bulls can overcome key resistance or if the broader downtrend resumes.
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