PCE is coming! Can USD/CHF break through 0.8150 in one fell swoop?
2025-07-31 19:58:29
The USD/CHF pair has recently risen significantly, reaching a high near 0.8150, a four-week high. On Thursday (July 31st), the pair fluctuated and consolidated at a high level, trading above 0.8110 before the US market opened. The market is currently focused on the upcoming release of the July PCE price index, which will provide further insights into the Federal Reserve's monetary policy outlook.
The US dollar index strengthened across the board on Wednesday. The Federal Reserve remained on hold as expected, while Chairman Powell emphasized that the current policy stance "remains patient" and reiterated that inflation trends will determine the policy path. This statement significantly weakened expectations of further rate hikes this year, strengthening the market consensus on "higher interest rates for longer," and providing continued support for the US dollar.
In terms of data, the US GDP grew at an annual rate that exceeded expectations. Despite weakening private investment and slightly moderate consumer spending, the overall economic resilience remains strong. In addition, ADP employment data showed a net increase of 104,000 jobs in July, far exceeding the expected 78,000, further confirming the stability of the job market.
In Switzerland, retail sales rose 3.8% year-on-year in June, beating both the previous reading and expectations, providing short-term support for the Swiss franc. However, as the bullish momentum of the US dollar dominated the market, the Swiss franc's rebound potential was limited.
Market attention is now turning to the PCE price index, which will be released tonight. The headline PCE is expected to rise to 2.5% year-on-year, with the core PCE remaining at 2.7%. If the data meets or exceeds expectations, it will further reinforce the Federal Reserve's high interest rate stance and strengthen medium-term support for the US dollar.
The current chart period is the 60-minute candlestick chart, and the exchange rate shows a bullish trend continuation structure. Since the 0.7941 level, the overall trend has been running above the middle line of the Bollinger Band. After breaking through the 0.8088 resistance, it rose to 0.8150 with large volume, forming a strong upward trend.
From the perspective of the Bollinger Bands, the channel has opened and the bandwidth has expanded, with the upper band at 0.8162, indicating that the upside potential has not yet reached its limit. The current K-line is consolidating near the middle Bollinger Band (0.8120) and has not lost the support level of 0.8110, indicating that bulls still have the upper hand.
On the MACD indicator, although the DIFF and DEA indicators are showing signs of a death cross, the MACD histogram is showing signs of shrinking green volume, indicating that bearish momentum has not yet formed an effective counterattack, which may be a technical consolidation within the trend. Analysts believe that if the exchange rate regains stability above 0.8135 in the future, it is expected to test the previous high of 0.8150 and challenge the upper resistance.
The Relative Strength Index (RSI) is currently at 55.48, in a neutral to bullish range with no clear overbought signals, suggesting further upside potential. Overall, the technical outlook remains bullish, with the market poised for further gains after a short-term period of consolidation.
With fundamentals and technicals resonating, the market currently has a strong consensus on the continued strength of the US dollar. Despite short-term positive Swiss economic data, the market still tends to hold US dollar assets due to the dominant US dollar liquidity.
Technical charts indicate no signs of weakening bullish sentiment, and intraday corrections are being viewed as opportunities for dips. The fine-tuning of the MACD and RSI suggests a rational market sentiment among short-term traders, with no signs of overheating.
In addition, the upcoming PCE inflation data is seen as a key variable, and market trading sentiment tends to be cautiously optimistic, presenting an overall "wait-and-see risk preference before the data is released" pattern.
Short-term outlook: Analysts believe that if tonight's PCE data meets or exceeds expectations, the exchange rate is expected to break through the 0.8150 resistance and further open up upside space, with the short-term target looking towards the 0.8180-0.8200 range; conversely, if the data is lower than expected, it may retreat to test the 0.8100 first-line support.
Medium- to Long-Term Outlook: The medium-term trend of the US dollar remains dependent on the evolution of inflation and employment data. Analysts believe that if subsequent data continues to be strong, the Fed's policy expectations of "higher interest rates for longer" will continue to strengthen bullish sentiment for the US dollar. However, the Swiss franc, as a safe-haven currency, has limited appeal in the absence of systemic risk-off events.
Therefore, in the medium and long term, USD/CHF is still expected to maintain a volatile upward channel. Traders will focus on the support level between 0.8080 and 0.8040, and the important resistance levels are 0.8160 and 0.8200 respectively.
Fundamentals
The US dollar index strengthened across the board on Wednesday. The Federal Reserve remained on hold as expected, while Chairman Powell emphasized that the current policy stance "remains patient" and reiterated that inflation trends will determine the policy path. This statement significantly weakened expectations of further rate hikes this year, strengthening the market consensus on "higher interest rates for longer," and providing continued support for the US dollar.
In terms of data, the US GDP grew at an annual rate that exceeded expectations. Despite weakening private investment and slightly moderate consumer spending, the overall economic resilience remains strong. In addition, ADP employment data showed a net increase of 104,000 jobs in July, far exceeding the expected 78,000, further confirming the stability of the job market.
In Switzerland, retail sales rose 3.8% year-on-year in June, beating both the previous reading and expectations, providing short-term support for the Swiss franc. However, as the bullish momentum of the US dollar dominated the market, the Swiss franc's rebound potential was limited.
Market attention is now turning to the PCE price index, which will be released tonight. The headline PCE is expected to rise to 2.5% year-on-year, with the core PCE remaining at 2.7%. If the data meets or exceeds expectations, it will further reinforce the Federal Reserve's high interest rate stance and strengthen medium-term support for the US dollar.
Technical aspects:
The current chart period is the 60-minute candlestick chart, and the exchange rate shows a bullish trend continuation structure. Since the 0.7941 level, the overall trend has been running above the middle line of the Bollinger Band. After breaking through the 0.8088 resistance, it rose to 0.8150 with large volume, forming a strong upward trend.
From the perspective of the Bollinger Bands, the channel has opened and the bandwidth has expanded, with the upper band at 0.8162, indicating that the upside potential has not yet reached its limit. The current K-line is consolidating near the middle Bollinger Band (0.8120) and has not lost the support level of 0.8110, indicating that bulls still have the upper hand.
On the MACD indicator, although the DIFF and DEA indicators are showing signs of a death cross, the MACD histogram is showing signs of shrinking green volume, indicating that bearish momentum has not yet formed an effective counterattack, which may be a technical consolidation within the trend. Analysts believe that if the exchange rate regains stability above 0.8135 in the future, it is expected to test the previous high of 0.8150 and challenge the upper resistance.
The Relative Strength Index (RSI) is currently at 55.48, in a neutral to bullish range with no clear overbought signals, suggesting further upside potential. Overall, the technical outlook remains bullish, with the market poised for further gains after a short-term period of consolidation.
Market sentiment observation:
With fundamentals and technicals resonating, the market currently has a strong consensus on the continued strength of the US dollar. Despite short-term positive Swiss economic data, the market still tends to hold US dollar assets due to the dominant US dollar liquidity.
Technical charts indicate no signs of weakening bullish sentiment, and intraday corrections are being viewed as opportunities for dips. The fine-tuning of the MACD and RSI suggests a rational market sentiment among short-term traders, with no signs of overheating.
In addition, the upcoming PCE inflation data is seen as a key variable, and market trading sentiment tends to be cautiously optimistic, presenting an overall "wait-and-see risk preference before the data is released" pattern.
Market outlook:
Short-term outlook: Analysts believe that if tonight's PCE data meets or exceeds expectations, the exchange rate is expected to break through the 0.8150 resistance and further open up upside space, with the short-term target looking towards the 0.8180-0.8200 range; conversely, if the data is lower than expected, it may retreat to test the 0.8100 first-line support.
Medium- to Long-Term Outlook: The medium-term trend of the US dollar remains dependent on the evolution of inflation and employment data. Analysts believe that if subsequent data continues to be strong, the Fed's policy expectations of "higher interest rates for longer" will continue to strengthen bullish sentiment for the US dollar. However, the Swiss franc, as a safe-haven currency, has limited appeal in the absence of systemic risk-off events.
Therefore, in the medium and long term, USD/CHF is still expected to maintain a volatile upward channel. Traders will focus on the support level between 0.8080 and 0.8040, and the important resistance levels are 0.8160 and 0.8200 respectively.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
