FX.co ★ bkhali | USD/CHF

USD/CHF Currency Pair Recovery on Monday On Monday, the USD/CHF currency pair fully recovered from its losses on Friday, rising to approximately 0.8985 during the North American trading session. This increase was largely driven by the strength of the US dollar, while the Swiss franc weakened due to shifting market expectations regarding the Federal Reserve's monetary policy. Strength of the US Dollar The US Dollar Index (DXY), which tracks the value of the dollar against major currencies, surged to 108.20. The dollar's strength was attributed to the cautious stance taken by Federal Reserve officials regarding potential interest rate cuts. Stabilized deflationary pressures and a resilient labor market have compelled policymakers to think more critically about their future decisions. Additionally, uncertainty surrounding the new US administration's economic policies has prompted Federal Reserve officials to adopt a measured approach. According to the latest projections, the Fed's federal funds rate is expected to rise to 3.9% by 2025. Furthermore, the CME FedWatch tool indicates that the market anticipates the Fed will maintain interest rates between 4.25% and 4.50% during the January 2025 policy meeting. Recent Performance of USD/CHF Since the end of September, the USD/CHF pair has seen an increase of 7%, reaching a five-month high of 0.9020. However, the pair has retreated slightly; nonetheless, it remains above the key support level of 0.8955. Technical Indicators and Market Outlook Analyzing technical indicators, the Moving Average Convergence Divergence (MACD) shows bullish momentum, while the Relative Strength Index (RSI) is above the neutral level of 50, indicating a potential for short-term correction. If the upward trend continues, the pair may face resistance at the 0.9050 level, a significant high from last July. The next resistance zone could be around 0.9160, which may cap further movements. Caution Advised for Market Participants Market participants should remain cautious, as despite the volatility, the USD/CHF pair may take new directions in the coming days. The interplay of economic factors and market sentiment will likely influence the pair's performance moving forward.