USD/CHF Price Analysis: Aims to recapture three-month high around 0.8900

The USD/CHF pair rises slightly above 0.8850 in Tuesday’s European session as investors turn cautious ahead of the Federal Reserve (Fed) Chair Jerome Powell’s testimony before Congress on Wednesday and the United States Nonfarm Payrolls (NFP) data later this week.

The Swiss Franc asset extends its upside as the US Dollar Index (DXY) rebounds from two-day low around 103.70. Fed Powell's commentary and the February labor market data will provide fresh insights about when the Fed will start reducing interest rates.

The Swiss Franc fails to find buying interest despite the annual Consumer Price Index (CPI) remaining stickier than expectations in February. The monthly CPI rose strongly by 0.6% against 0.2% in January. The monthly pace was significantly higher than required to keep inflation below 2%. The annual CPI at 1.2% was higher than expectations of 1.1% but lower than the prior reading of 1.3%.

Meanwhile, it is announced that the SNB is looking for the successor of Chairman Thomas J. Jordan. The new SNB Chairman will be announced in the second half of this year.

USD/CHF falls while attempting to deliver a breakout of the consolidation formed in a range of 0.8744-0.8898 on a four-hour timeframe. A mild sell-off near the upper end of the consolidation doesn’t indicate a reversal but indicates that US Dollar bulls need more force for a decisive break. The consolidation pattern indicates a sharp volatility contraction. A breakout in the same will result in a volatility expansion, leading to wider ticks and heavy volume.

The 50-period Exponential Moving Average (EMA) near 0.8822 continues to support the US Dollar bulls.

The 14-period Relative Strength Index (RSI) climbs above 60.00. A bullish momentum would emerge if the RSI (14) manages to sustain above the same.

Fresh upside would emerge if the asset breaks above the three-month high around 0.8900, which would unlock upside towards September 20 low at 0.8932 and November 8 low at 0.8976.

On the contrary, a breakdown below February 13 low at 0.8746 would expose the asset to the round-level support of 0.8700, followed by February 1 high around 0.8650.

USD/CHF four-hour chart