This week's calendar features several high-impact economic releases and policy announcements that will influence market sentiment and potential trading opportunities. Notably, central bank decisions and key data from Switzerland, the Eurozone, the US, and the UK are on tap. Against this backdrop, the USDCHF has rebounded from recent lows and could gain further traction if it surpasses critical technical thresholds. Meanwhile, fundamental factors—such as the Swiss National Bank's recent rate cut—add another layer of complexity to the currency pair's outlook.
Overview
This week's calendar features several high-impact economic releases and policy announcements that will influence market sentiment and potential trading opportunities. Notably, central bank decisions and key data from Switzerland, the Eurozone, the US, and the UK are on tap. Against this backdrop, the USDCHF has rebounded from recent lows and could gain further traction if it surpasses critical technical thresholds. Meanwhile, fundamental factors—such as the Swiss National Bank's recent rate cut—add another layer of complexity to the currency pair's outlook.
Key Economic Events
Thursday 10:30 am (GMT+2) - Switzerland: SNB Policy Rate (CHF)
Thursday 15:15 (GMT+2) - Europe: Main Refinancing Rate (EUR)
Thursday 15:30 (GMT+2) - USA: PPI m/m (USD)
Thursday 15:30 (GMT+2) - USA: Unemployment Claims (USD)
Friday 09:00 am (GMT+2) - UK: GDP m/m (GBP)
Technical Analysis
The USDCHF currency pair rebounded from its recent low following a 50 basis-point policy rate reduction. A decisive break above the key resistance level at 0.88885 would likely pave the way for further upside potential. This outlook is underpinned by supportive technical indicators, as the price currently trades above the 50-period Exponential Moving Average (EMA), underscoring an emerging uptrend.
In addition, the Momentum Oscillator and the Relative Strength Index (RSI) both remain above their respective neutral thresholds of 100 and 50. This sustained strength in the indicators reinforces the intensifying bullish pressure and supports the case for continued appreciation.
Potential Upside Targets
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
0.88885: The initial resistance is 0.88885, which represents a swing high from December 2.
0.89565: The second price target is identified at 0.89565, corresponding to the daily high marked on November 22.
0.89842: The third target is established at 0.89842, aligning with the 161.8% Fibonacci Extension drawn from the swing high, 0.88885, to the swing low, 0.87331.
0.90253: An additional price target is estimated at 0.90253, which corresponds to the weekly resistance, R3, calculated using the standard Pivot Points methodology.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
0.87331: The first level of support is determined at 0.87331, corresponding to the December 6 swing low, which also aligns with the 38.2% Fibonacci Retracement measured from the 0.83740 low to the 0.89565 high.
0.86433: The second support level is identified at 0.86433, reflecting the 261.8% Fibonacci Extension drawn from the swing low, 0.87943, to the swing high, 0.88885.
0.85951: The third support level is seen at 0.85951, corresponding to the 61.8% Fibonacci Retracement measured from the 0.83740 low to the 0.89565 high.
0.84924: An additional downward target is observed at 0.85924, corresponding to the 423.6% Fibonacci Extension drawn from the swing low, 0.87943, to the swing high, 0.88885.
Fundamentals
The Swiss National Bank (SNB) lowered its policy rate by 0.5 percentage points to 0.5%, effective December 13, 2024, reflecting reduced underlying inflationary pressure. Inflation declined from 1.1% in August to 0.7% in November, remaining within the SNB's price stability objective over the medium term. The bank will continue monitoring developments closely, adjusting policy as needed.
Global economic growth was moderate, and while inflation has generally eased closer to central bank targets worldwide, core inflation remains elevated. International uncertainties, including uncertain US policy directions and increased geopolitical risks, could influence future growth and inflation prospects.
Domestically, Swiss GDP growth was modest in the third quarter, with moderate gains in services and weaker performance in manufacturing. The SNB expects around 1% growth for 2024 and a slight uptick to 1%–1.5% in 2025, aided by recent rate cuts. However, higher unemployment and somewhat lower capacity utilization are anticipated. Despite these challenges, the SNB's current policy stance aims to ensure price stability and support steady economic growth.
Conclusion
In conclusion, the USDCHF faces a shifting landscape shaped by key economic events, shifting monetary policies, and evolving global conditions. While technical indicators suggest the potential for further upside, the Swiss National Bank's recent rate cut and ongoing uncertainties—both domestic and international—inject complexity into the currency's outlook. Close monitoring of upcoming high-impact releases, price action relative to key technical levels, and the broader economic backdrop will be essential for navigating this environment.