With double support, can USD/CHF break through the suppression?
2025-07-29 18:02:34
The US dollar/Swiss franc (USD/CHF) pair continued its rebound during the European session on Tuesday (July 29th), trading around 0.8050. Recent progress in negotiations between the United States and its major trading partners has significantly boosted market risk appetite, while the Federal Reserve's upcoming interest rate decision has also become a key focus. With the dollar stabilizing and safe-haven demand for the Swiss franc easing, the exchange rate is showing some signs of a short-term corrective rebound.
The US and Europe recently finalized a trade agreement, which will impose a 15% tariff on most European goods starting August 1. While this agreement will increase the cost of some goods, the market generally interprets it as a sign of clarification in trade relations, helping to alleviate previous uncertainty.
In addition, according to Reuters, the US President announced on social media on Monday that he would resume negotiations with Cambodia and Thailand after the two countries ended a five-day border friction. These positive news on the trade front have increased the overall appeal of the US dollar.
On the monetary policy front, the Federal Reserve is expected to maintain its benchmark interest rate at a range of 4.25% to 4.50% at its meeting this Wednesday. Market attention will shift to the Federal Open Market Committee (FOMC) Chair's press conference, particularly whether he hints at a September rate cut cycle. Meanwhile, the US will also release second-quarter PCE inflation data and July non-farm payroll data this week, further testing the resilience of the US economy.
Meanwhile, in Switzerland, while market risk appetite has weakened the safe-haven demand for the Swiss franc, the recent June Swiss inflation report showed relatively stable prices, prompting market speculation that the Swiss National Bank (SNB) may temporarily hold off on further monetary easing, thus providing some support for the Swiss franc. Overall, while the US dollar is supported on a macroeconomic basis, the Swiss franc's downside potential is limited.
USD/CHF has stabilized and rebounded from a low of 0.7871 on the daily chart, currently trading around 0.8050, above the middle Bollinger Band at 0.7976. The upper Bollinger Band is at 0.8065, while the lower Bollinger Band is at 0.7887. The overall band is narrowing, indicating a decrease in volatility and a market accumulation phase.
The exchange rate has approached the key resistance level of 0.8100 during its upward movement. This level resonates with the upper Bollinger Band and the previous high trading volume area, suggesting some short-term technical pressure. Analysts believe that a successful breakthrough of this level will open up further upside potential. Support levels below are 0.8030 and the middle Bollinger Band. A break below this level could lead to a retest of the low of 0.7871.
Regarding indicators, the MACD shows a slight correction in both the DIFF and DEA levels below the zero axis, with the red bar chart gradually expanding, indicating a rebound in short-term bullish momentum. However, both the DIFF and DEA levels remain in negative territory, and an upward trend has yet to be fully confirmed. The Relative Strength Index (RSI) is at 55.35, breaking through neutral territory and indicating a relatively strong trend, but still has room to move closer to overbought territory. Overall, the technical analysis suggests a mild short-term rebound, but strong resistance above suggests a trend reversal remains to be confirmed.
Market sentiment has recently shifted towards a positive trend, influenced by multiple factors. First, progress in trade negotiations has reduced uncertainty in global markets, reducing safe-haven demand and thus weakening the Swiss franc's appeal. Second, expectations of a stabilization by the Federal Reserve and potential easing signals in September are supporting the dollar's medium-term outlook.
However, market caution has not been completely eliminated. Stable inflation in Switzerland has led to market expectations that the Swiss National Bank may delay further easing, which has somewhat curbed the depreciation of the Swiss franc. Meanwhile, if this week's US PCE and non-farm payroll data fall short of expectations, market risk appetite could come under renewed pressure.
Overall, market sentiment is a mixture of moderate optimism and caution. Bullish market sentiment has rebounded, but bearish market sentiment still exists potentially and may be triggered at any time by data or news.
Bullish outlook analysis believes that if the exchange rate can effectively break through the 0.8100 resistance level, it is expected to open up further upside space, and the first target may be at 0.8200. If the MACD and RSI indicators strengthen simultaneously at that time, the market may form a mid-term technical rebound. Fundamentally, if the Federal Reserve hints that the probability of a September rate cut is reduced, the US dollar is expected to continue to receive support.
The bearish outlook analysis believes that if the exchange rate encounters resistance and falls back near 0.8100, the key support levels below are 0.8030 and 0.7871; once it falls below 0.7871, it may restart a new round of downward trend; if the PCE inflation or non-farm employment data to be released by the United States is significantly lower than expected, it will weaken the attractiveness of the US dollar and allow the Swiss franc to regain safe-haven buying support.
Overall, analysts believe that the short-term market may maintain a technical rebound, but the medium- and long-term direction will still depend on fundamental data and the Federal Reserve's policy signals.
Fundamentals
The US and Europe recently finalized a trade agreement, which will impose a 15% tariff on most European goods starting August 1. While this agreement will increase the cost of some goods, the market generally interprets it as a sign of clarification in trade relations, helping to alleviate previous uncertainty.
In addition, according to Reuters, the US President announced on social media on Monday that he would resume negotiations with Cambodia and Thailand after the two countries ended a five-day border friction. These positive news on the trade front have increased the overall appeal of the US dollar.
On the monetary policy front, the Federal Reserve is expected to maintain its benchmark interest rate at a range of 4.25% to 4.50% at its meeting this Wednesday. Market attention will shift to the Federal Open Market Committee (FOMC) Chair's press conference, particularly whether he hints at a September rate cut cycle. Meanwhile, the US will also release second-quarter PCE inflation data and July non-farm payroll data this week, further testing the resilience of the US economy.
Meanwhile, in Switzerland, while market risk appetite has weakened the safe-haven demand for the Swiss franc, the recent June Swiss inflation report showed relatively stable prices, prompting market speculation that the Swiss National Bank (SNB) may temporarily hold off on further monetary easing, thus providing some support for the Swiss franc. Overall, while the US dollar is supported on a macroeconomic basis, the Swiss franc's downside potential is limited.
Technical aspects:
USD/CHF has stabilized and rebounded from a low of 0.7871 on the daily chart, currently trading around 0.8050, above the middle Bollinger Band at 0.7976. The upper Bollinger Band is at 0.8065, while the lower Bollinger Band is at 0.7887. The overall band is narrowing, indicating a decrease in volatility and a market accumulation phase.
The exchange rate has approached the key resistance level of 0.8100 during its upward movement. This level resonates with the upper Bollinger Band and the previous high trading volume area, suggesting some short-term technical pressure. Analysts believe that a successful breakthrough of this level will open up further upside potential. Support levels below are 0.8030 and the middle Bollinger Band. A break below this level could lead to a retest of the low of 0.7871.
Regarding indicators, the MACD shows a slight correction in both the DIFF and DEA levels below the zero axis, with the red bar chart gradually expanding, indicating a rebound in short-term bullish momentum. However, both the DIFF and DEA levels remain in negative territory, and an upward trend has yet to be fully confirmed. The Relative Strength Index (RSI) is at 55.35, breaking through neutral territory and indicating a relatively strong trend, but still has room to move closer to overbought territory. Overall, the technical analysis suggests a mild short-term rebound, but strong resistance above suggests a trend reversal remains to be confirmed.
Market Sentiment Observation
Market sentiment has recently shifted towards a positive trend, influenced by multiple factors. First, progress in trade negotiations has reduced uncertainty in global markets, reducing safe-haven demand and thus weakening the Swiss franc's appeal. Second, expectations of a stabilization by the Federal Reserve and potential easing signals in September are supporting the dollar's medium-term outlook.
However, market caution has not been completely eliminated. Stable inflation in Switzerland has led to market expectations that the Swiss National Bank may delay further easing, which has somewhat curbed the depreciation of the Swiss franc. Meanwhile, if this week's US PCE and non-farm payroll data fall short of expectations, market risk appetite could come under renewed pressure.
Overall, market sentiment is a mixture of moderate optimism and caution. Bullish market sentiment has rebounded, but bearish market sentiment still exists potentially and may be triggered at any time by data or news.
Outlook
Bullish outlook analysis believes that if the exchange rate can effectively break through the 0.8100 resistance level, it is expected to open up further upside space, and the first target may be at 0.8200. If the MACD and RSI indicators strengthen simultaneously at that time, the market may form a mid-term technical rebound. Fundamentally, if the Federal Reserve hints that the probability of a September rate cut is reduced, the US dollar is expected to continue to receive support.
The bearish outlook analysis believes that if the exchange rate encounters resistance and falls back near 0.8100, the key support levels below are 0.8030 and 0.7871; once it falls below 0.7871, it may restart a new round of downward trend; if the PCE inflation or non-farm employment data to be released by the United States is significantly lower than expected, it will weaken the attractiveness of the US dollar and allow the Swiss franc to regain safe-haven buying support.
Overall, analysts believe that the short-term market may maintain a technical rebound, but the medium- and long-term direction will still depend on fundamental data and the Federal Reserve's policy signals.
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