- USD/CHF recovers near 0.9000 ahead of Fed’s Powell testimony.
- Investors expect the Fed to begin cutting interest rates as early as September.
- Market speculation about further rate cuts by the SNB has improved.
The USD/CHF pair bounces near the psychological resistance of 0.9000 in the European session on Tuesday. The Swiss Franc asset rises as the US Dollar (USD) gains ground ahead of Federal Reserve (Fed) Chair Jerome Powell’s semi-annual testimony before Congress scheduled for 14:00 GMT.
The Dollar Index (DXY), which tracks the greenback against six major currencies, is holding steady after falling to a fresh three-week low near 104.85.
Fed’s Powell will provide clues as to when the central bank will start cutting interest rates. Financial markets currently expect the Fed to start cutting its key rates as early as the September meeting. This week, the main trigger for the US dollar will be the US inflation data for June, due out on Thursday.
On the Swiss Franc front, investors are hoping that the Swiss National Bank (SNB) may continue to ease its monetary policy as inflation in the Swiss economy has slowed further. Swiss annual inflation grew at a slower pace of 1.3% in June from estimates and the previous release of 1.4%.
The USD/CHF is trading in a Descending Channel chart pattern on a daily timeframe where every pullback is considered a selling opportunity by market participants. The Swiss Franc asset finds support near the 200-day exponential moving average (EMA) around 0.8950, which suggests that a long-term uptrend is intact.
The 14-day RSI is fluctuating in the range of 40.00-60.00, suggesting indecision among investors.
Moving forward, a decisive rally above the June 3 high at 0.9036 will propel the asset towards the May 28 low at 0.9086, followed by the May 30 high at 0.9140.
On the other hand, the asset would be exposed to downside if it breaks below the June 4 low of 0.8900. This would drag the asset towards the March 21 low at 0.8840 and the round support level of 0.8800.
USD/CHF daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
