Its primary goal is to ensure price stability, while taking due account of economic developments. As the price approaches this long-term support, a potential rebound may be triggered, but it is likely to be capped by the resistance due to the strong bearish price development. As long as the price remains below $1.02, the long-term bearish pressure is likely to persist. Additionally, the U.S. experienced high inflation and economic instability during the 1970s, particularly driven by the 1973 oil crisis, which weakened the dollar. On the other hand, Switzerland’s economy remained stable, with low inflation and a strong financial sector, making the Swiss franc a preferred safe-haven currency.

The strength of the Swiss franc is evident in the chart below, which shows the percentage change in price for major Swiss pairs during the 21st century. It is observed that the Swiss franc has outperformed major currencies, with USD/CHF down by 46.70%, EUR/CHF down by 41.73%, and GBP/CHF down by 56.80%. These figures indicate a strong Swiss franc and a bearish trend for these pairs, reflecting CHF’s continued strength. The Swiss franc is the only franc left in Europe after the rest joined the euro.

The Euro is the second reference currency in the world (after the US Dollar) and any move by its central bank, the ECB, has consequences on the assessment of its partners. Finally, the SIX Swiss Exchange (formerly SWX Swiss Exchange), based in Zurich, is Switzerland’s principal stock exchange (the other being Berne eXchange). In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted. This enables the comparison between the average forecast price and the effective close price. The European Central Bank is expected to cut key rates by 25 bps at the September policy meeting. ECB President Christine Lagarde’s presser and updated economic forecasts will be closely scrutinized for fresh policy cues.

USD/CAD Price Forecast: 1.3600 remains key resistance for US Dollar bulls

It is often seen as a safe-haven currency (any globally traded currency that serves as axitrader review a reliable and stable store of value). In times of uncertainty, the franc usually stays stable or appreciates against its European counterparts. The USD/CHF tends to have a negative correlation with the EUR/USD and GBP/USD currency pairs.

He employs his technical background to challenge the prevalent assumptions and profit from misconceptions. By displaying three central tendency measures (mean, median, and mode), you can know if the average forecast is being skewed by any outlier among the poll participants. This measure is basically an arithmetical average of the three central tendency measures (mean, median, and mode). It smooths the typical outcome eliminating any possible noise caused by outliers.

USD/CHF continues to weaken as the US dollar remains under pressure, with US Treasury yields continuing to decline. The decline in U.S. yields signals investor expectation of a softer monetary policy from the Federal Reserve (Fed). The decline in Switzerland’s foreign currency reserves suggests that the SNB may have limited room for further intervention in the currency markets, which could allow the CHF to strengthen naturally. A continued drop in reserves might indicate that the SNB is less willing or able to weaken the franc, potentially paving the way for CHF appreciation. If the SNB scales back its interventions, the franc could gain momentum, especially as the U.S. dollar faces pressure from the Fed’s dovish stance. The Bank for International Settlements (BIS) is also an organization to take into account when trading the Swiss Franc.

US Dollar and Swiss Franc events

After the 2001 dot-com bubble burst and the 9/11 attacks, the U.S. economy faced significant challenges, leading to low interest rates and a weaker dollar. The global financial crisis of 2008 exacerbated the situation, as investors flocked to the Swiss franc for its perceived stability during periods of uncertainty. Furthermore, U.S. monetary policy during this time, including aggressive quantitative easing programs, further devalued the dollar. In contrast, Switzerland maintained low inflation and a stable economy, contributing to the USD/CHF decline throughout the decade. The SNB recently lowered its policy rate by 25 basis points to 1.25% in June 2024, a move that aligned with market expectations due to falling inflation and the strong performance of the Swiss franc.

This shift led to a period of floating exchange rates and a loss of confidence in the U.S. dollar. To further understand the 13 years of consolidation in USD/CHF, the quarterly chart is zoomed into the monthly chart, which clearly shows this consolidation. When prices rebound from the 13-year support, each rebound is capped by the resistance line, increasing the selling pressure. Additionally, the price is trading below the cross of the 50 and 100 Simple Moving Averages, indicating a strong bearish trend in the USD/CHF market. The recent decline began after the price hit the resistance of the 40 SMA and is now challenging the long-term support line. A break below this support line could trigger a strong and rapid downside move.

FED NEWS & ANALYSIS

Inflation spiked following the COVID-19 pandemic, but by 2023 had decreased to 2.13%. This downward trend in inflation could further reinforce expectations of monetary easing by the SNB, adding downward pressure on the Swiss franc if such measures are implemented. The USD/CHF pair has been under consistent downward pressure as the U.S. dollar struggles amid softening Treasury yields and expectations of a more accommodative stance from the Federal Reserve. U.S. data revealed that core CPI increased by 0.3% in August, exceeding market expectations of 0.2%, which provided support for the U.S. dollar. Meanwhile, the Swiss franc, known for its safe-haven status, continues to benefit from global economic uncertainties, reinforcing its strength against the dollar. The third major drop in USD/CHF occurred from 2001 to 2011, driven by the prolonged weakness of the U.S. dollar and the Swiss franc’s status as a safe-haven currency.

This agreement involved the U.S., Japan, West Germany, France, and the U.K., aiming to reduce the U.S. trade deficit by depreciating the dollar. As the U.S. dollar weakened globally, the Swiss franc, viewed as a stable and safe-haven currency, appreciated against the dollar. Additionally, concerns over the U.S. fiscal deficit and rising protectionism contributed to a loss of confidence in the dollar, leading to further declines in the USD/CHF exchange rate during this period. Each participant’s bias is calculated automatically based on the week’s close price and recent volatility. The Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole.

USD/CHF Forecast: Approaching Key Long-Term Support Amid Dollar Weakness

On the other hand, developments in Switzerland suggest a potential easing of monetary policy by the SNB. Inflation in Switzerland has dropped to a five-month low, fueling speculation about another rate cut by the SNB. While the Fed’s potential dovish stance may weaken the USD, a rate cut from the SNB could limit CHF gains, possibly stabilizing the USD/CHF exchange rate. The chart below illustrates the long-term inflation trend in Switzerland, showing that inflation has been on a general downward trajectory over the long term.

1. Each participant’s bias is calculated automatically based on the week’s close price and recent volatility.
2. It is often seen as a safe-haven currency (any globally traded currency that serves as a reliable and stable store of value).
3. The decline in U.S. yields signals investor expectation of a softer monetary policy from the Federal Reserve (Fed).
4. The Swiss franc is the only franc left in Europe after the rest joined the euro.
5. WTI Oil is rebounding off four-month lows on renewed expectations the Fed may cut interest rates by 50 bps.

There is speculation that further rate cuts may follow, depending on how inflation trends develop in the coming months. The SNB expects the economy to grow modestly, with GDP forecasted to rise by 1% in 2024 and 1.5% in 2025, alongside a slight increase in unemployment and stable production capacity. The long-term trend for USD/CHF remains strongly bearish, as seen in the quarterly chart below. The chart highlights the continuation of strong bearish pressure on USD/CHF, marked by green arrows. The first significant drop is observed from 1970 to 1978, driven by a combination of geopolitical and economic factors. The collapse of the Bretton Woods system in 1971, which ended the U.S. dollar’s convertibility to gold, marked a critical turning point.

Despite the lower reading in the headline inflation figure for the US, core inflation showed a slight uptick on a monthly basis. This unexpected increase caught markets off guard, as many were anticipating a further decline in inflation, potentially paving the way for a 50 basis point rate cut from the U.S. Federal Reserve and its Federal Open Market Committee (FOMC) in the coming week. The labor market’s recent performance, which has cast doubt on the need for an aggressive 50-basis point cut, adds complexity to this situation. This scenario would likely push the USD/CHF pair lower, especially as the Swiss Franc (CHF) tends to strengthen when global economic uncertainty increases. The second major historical drop is observed from 1985 to 1987 which was largely driven by the coordinated efforts of major economies to weaken the U.S. dollar, known as the Plaza Accord of 1985.

It is a sentiment indicator which delivers actionable price levels, not merely “mood” or “positioning” indications. Traders can check if there is unanimity among the surveyed experts – if there is excessive speculator sentiment driving a market – or if there are divergences among them. When sentiment is not at extremes, traders get actionable price targets to trade upon. When there is deviation between actual market rate and value reflected in forecasted rate, there is usually an opportunity to enter the market. Gold preserves its bullish momentum and trades near $2,580 after setting a new record-high slightly above this level. The 10-year US Treasury bond yield stays in the red below 3.7% as markets reassess the odds of a large Fed rate cut, helping XAU/USD push higher.

USD/JPY Weekly Price Forecast – US Dollar Continues to Test Trendlines

However, after the 2011 rebound, the USD/CHF market has been consolidating within a tight range for 13 years, with this consolidation producing bearish price action. These 13 years of consolidation indicate that a break below this prolonged price range could potentially trigger another coinmama exchange review strong decline in the USD/CHF market. Bouts of volatility (or extreme flat volatility) can be then compared to the typical outcome expressed through the averages. The central bank of the Eurozone (the ECB, European Central Bank) also has influence on the Swissie due to the importance of business and trade between the UE and Switzerland. Any assessment of possible scenarios linked to a macroeconomic decision taken by the ECB has impact on its commercial partners.