USD/CHF Price Analysis: Steady around the 0.9870 area as bull’s eye parity

The Swiss franc remains defensive during the day, failing to recover from heavy losses in the week, which amount to 1.45% so far, with some time ahead of Wall Street’s close. At the time of writing, the USD/CHF is trading at 0.9877 amidst a risk-off market mood.

On Friday, US equities prepare to finish the week on a lower note. In the meantime, US Treasury yields keep pushing higher, led by the 10-year benchmark note at around 3.12%, one bps short of YTD highs.

The US Dollar Index, a measurement of the greenback’s value against a six currencies basket, is pairing early day losses, up 0.04%, currently at 103.589.

During Friday’s trading session, the USD/CHF opened near 0.9850 in the Asian Pacific session and fluctuated in a 30-pip range of 0.9850-80 amid the lack of catalyst as FX traders head into the weekend.

USD/CHF Price Forecast: Technical outlook

The USD/CHF seems poised to extend its gains towards the next week, despite that the major retreated from YTD highs around 0.9890. The Relative Strength Index (RSI) at 80.33 shows the pair well within overbought territory but is still aiming higher, meaning that a leg-up might be on the cards.

In the meantime, the 1-hour chart shows that once the USD/CHF re<ched 0.9890, 2022’s YTD high consolidated in the 0.9825-90 area. It’s worth noting that the 50, 100, and 200-simple moving averages (SMAs) remain below the spot price, meaning that USD bulls remain in charge.

If the USD/CHF breaks the top of the range, the first resistance would be the 0.9900 mark. Once cleared, the R1 daily pivot would be the next supply zone around 0.9920, followed by the R2 pivot point at the USD/CHF parity.

On the other hand, the USD/CHF first support would be the confluence of the 50-SMA and the daily pivot at around 0.9818-20. A breach of the latter would expose the 100-SMA at 0.9802, followed by the confluence of the S1 daily pivot and the 200-SMA near the 0.9740-47 range.

Key Technical Levels