USD/CHF 4-Hour Timeframe AnalysisUSD/CHF 4-Hour Timeframe Analysis
The USD/CHF pair remains in a well-defined downtrend, forming a series of lower highs (LH) and lower lows (LL) on the 4-hour timeframe. Recently, the price broke below the 0.88100 minor key level, which has now turned into a resistance zone, reinforcing the bearish momentum. Following the breakdown, the market accumulated a significant volume of sell positions before initiating a liquidity hunt where price temporarily moved higher to trigger stop losses before resuming its downward trajectory. Currently, the pair is showing renewed selling pressure, and we are observing whether price will revisit the 0.88050 region for a minor pullback before continuing lower.
Key Technical Levels
Key Resistance: 0.88100 (Previous Support Turned Resistance)
Observation Zone: 0.88050 (Potential Retest Area)
Next Support Target: 0.87040 (Next Significant Support Level)
Fundamental Insight:
The Swiss franc (CHF) continues to strengthen, supported by the Swiss National Bank’s (SNB) shift in intervention strategy. Unlike 2023, where the SNB sold over 132.9 billion CHF in foreign currency, this year has seen a net purchase of 1.2 billion CHF, indicating confidence in its inflation management. The current inflation rate at 1.1% remains within the SNB’s comfort range, reducing the likelihood of further aggressive monetary policy adjustments.
Traders are closely watching the SNB’s policy rate decision scheduled for release this week. The forecast suggests a potential rate cut from -0.50% to -0.25%, which could signal a slightly more accommodative stance by the SNB. However, the impact on CHF strength will depend on market expectations versus actual policy action. If the rate cut is confirmed, it could temporarily weaken CHF, providing short-term relief for USD/CHF. Conversely, if the SNB maintains a cautious approach, CHF may continue to gain strength, reinforcing the bearish technical outlook for USD/CHF.
Meanwhile, the US dollar faces near-term headwinds amid uncertainty surrounding Federal Reserve policy expectations. The market remains cautious about potential rate cuts later in the year, limiting USD upside potential.
📌 Disclaimer:
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading involves substantial risk, and past performance is not indicative of future results. Always conduct your own research and consult with a financial professional before making any investment decisions.
