Last week, the USD/CHF pair corrected sharply lower and tested the 0.7934 level (Murray level [2/8]), where it continues to trade after the release of the latest monetary policy decisions from the US Federal Reserve and the Swiss National Bank.
The US regulator cut interest rates by 25 basis points to 3.75% and announced the start of Treasury bond purchases worth $40.0 billion. However, officials did not provide clear guidance on further policy steps, which disappointed investors and forex traders. Moreover, the so-called “dot plot” confirmed only one rate cut expected next year, while comments from Fed Chair Jerome Powell about a possible shift to a wait-and-see approach reinforced expectations that borrowing costs could remain unchanged for an extended period.
Meanwhile, the Swiss National Bank refrained from pushing interest rates into negative territory and kept the policy rate at 0.00%. Officials noted that a recent agreement to reduce US tariffs on Swiss goods has improved the country’s economic outlook. As a result, analysts now expect monetary policy to remain unchanged throughout next year, despite persistently low inflation. It is also worth noting that November producer price index data released today confirmed continued negative dynamics: the indicator fell from –0.3% to –0.5% month-on-month, while the annual figure improved slightly from –1.7% to –1.6%.
Overall, fundamental factors continue to point to the possibility of further weakening in USD/CHF over the medium term.
Support and resistance levels
The instrument is forming a medium-term upward trend and a corresponding channel. At present, the price is close to the lower boundary of this channel near 0.7934 (Murray level [2/8]). A sustained move below this level would open the way toward 0.7873 (Murray level [1/8]) and 0.7812 (Murray level [0/8]). Conversely, a break above the mid-line of the Bollinger Bands at 0.8030 would signal potential growth toward 0.8117 (Murray level [5/8]) and 0.8178 (Murray level [6/8]).
Technical indicators are giving mixed signals: Bollinger Bands are flattening, the MACD histogram is hovering near the zero line with limited momentum, while the Stochastic oscillator is attempting to turn higher from oversold territory.
Resistance levels: 0.8030, 0.8117, 0.8178.
Support levels: 0.7934, 0.7873, 0.7812.
Trading scenarios and USD/CHF forecast
Short positions can be considered below 0.7934 with targets at 0.7873 and 0.7812 and a stop-loss at 0.7974. Time horizon: 5–7 days.
Long positions can be considered on a sustained break above 0.8030 with targets at 0.8117 and 0.8178 and a stop-loss at 0.7990.