The Swiss franc continues to stay close to 0.9 per US dollar, which is very close to its monthly high of 0.89, which the USD/CHF pair showed to market participants on June 15th. All this comes against the backdrop of the fifth consecutive rate hike by the Swiss National Bank and its indication of a potential rate hike in the future to overcome inflationary pressures. Despite a downward revision to the inflation forecast for 2023, the central bank raised its inflation forecast for 2024 due to rising electricity prices and rents, as well as persistent inflationary pressures in other neighboring countries. The latest forecast assumes an average annual inflation rate of 2.2% in both 2023 and 2024, with a slight decline to 2.1% projected for 2025. These figures indicate that inflation will remain above the target range of 0-2% in the coming years, all of which will push the Swiss central bank to continue raising interest rates in the future, which could support the Swiss Franc against the US Dollar.
USD/CHF Weekly Forecast July 3 — 7, 2023
Currency pair Dollar Franc USD/CHF completes the trading week near the level of 0.9012. The pair continues to move within the framework of a slight rise and the beginning of the development of the “Wedge” reversal pattern. Moving averages indicate a bearish trend. Prices went down from the area between the signal lines, which indicates pressure from sellers of the US currency and a potential continuation of the fall of the instrument from current levels. At the moment, we should expect an attempt to develop a price reduction and test the support area near the level of 0.8875. Further, a rebound upwards and an attempt to continue the growth of the pair with a potential target above the level of 0.9655.
An additional signal in favor of the rise of the Dollar Franc currency pair will be a test of the trend line on the relative strength index (RSI). The second signal will be a rebound from the upper border of the “Wedge” reversal pattern. Cancellation of the USD/CHF growth option will be a fall and a breakdown of the 0.8635 area. This will indicate a breakdown of the support area and a continuation of the fall of the pair on Forex with a target below the 0.8295 area. Confirmation of the growth of the pair in the current trading week July 3 — 7, 2023 will be a breakdown of the resistance area and the closing of quotes above the level of 0.9105.
USD/CHF Weekly Forecast July 3 — 7, 2023 suggests an attempt to continue the development of the correction and test the support level near the area of 0.8875. Then, the continuation of the growth of USD/CHF to the area above the level of 0.9655. In favor of the rise will be a test of the trend line on the relative strength index (RSI). Cancellation of the USD/CHF growth option will be a breakdown of the support area and closing of quotes below the level of 0.8635. This will indicate a continued decline in the pair with a potential target below the level of 0.8295.
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