. USD/CHF News: Stronger US Dollar Pushes Pair to 0.8860

USD/CHF News: Stronger US Dollar Pushes Pair to 0.8860

01 Mar 2024

The USD/CHF price climbs to 0.8850, driven by a stronger US Dollar

FUNDAMENTAL OVERVIEW:

  • The USD/CHF rises to 0.8860, bolstered by increased US core PCE inflation data, strengthening the US Dollar.
  • The Swiss Franc faces pressure as the SNB is anticipated to spearhead a global rate-cut cycle.
  • Investors look to the US Manufacturing PMI for new perspectives on the economic landscape.

In the European session on Friday, the USD/CHF pair continues its upward movement, reaching 0.8860. The Swiss Franc gains strength amid a resilient US Dollar and expectations that the Swiss National Bank (SNB) will take the lead in initiating a rate-cut cycle.

The US Dollar Index (DXY), measuring the Greenback against six major currencies, has stabilized around 104.20 following a rapid rebound from 103.70.

The US Dollar gains traction as the January core Personal Consumption Expenditure Price Index (PCE) data reveals higher figures. This suggests a challenging path for the Federal Reserve (Fed) to reach its 2% inflation target. The monthly core inflation, meeting expectations, grew by 0.4%, surpassing the 0.2% pace required for price stability.

Simultaneously, the diminished inflationary forces in the Swiss economy have increased the likelihood of rate cuts by the Swiss National Bank (SNB) in March. In January, inflation dropped to 1.3%, falling short of the anticipated 1.7%, leading the SNB to shift towards a more dovish monetary policy stance.

During today’s session, market observers will focus on the US ISM Manufacturing PMI for February, scheduled for release at 15:00 GMT. Investors expect the factory data to register at 49.5, surpassing January’s 49.1 but still below the crucial 50.0 threshold.

USD/CHF TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

USD/CHF is trading within an up channel.

USD/CHF is positioned above all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Positive trend.

Immediate Resistance level: 0.8860

Immediate support level: 0.8777

HOW TO TRADE USD/CHF

Following a dip in prices, USD/CHF found support and reversed its direction upwards, creating higher highs and moving towards a significant resistance zone. If this zone is breached, additional upside potential may be anticipated.

TRADE SUGGESTION- STOP BUY– 0.8877, TAKE PROFIT AT- 0.8976, SL AT- 0.8820.