- USD/CHF is struggling to find direction as volatility has squeezed amid a long weekend in the United States.
- Fed minutes will provide a detailed explanation behind an interest rate hike of 25bps.
- The Swiss Franc asset is testing the breakout of the downward-sloping trendline plotted from 0.9600.
The USD/CHF pair is oscillating in a narrow range around 0.9230 in the early Asian session. The Swiss Franc asset has turned sideways following the footprints of the US Dollar Index (DXY). The USD Index failed to gauge a decisive movement amid less trading activity due to an elongated weekend in the United States amid a holiday on Monday due to Presidents’ Day.
Investors are shifting their focus towards the release of the preliminary S&P PMI (Feb) figures and the Federal Reserve (Fed) minutes. The minutes from the Fed will provide a detailed explanation of hiking interest rates by 25 basis points (bps) in the February monetary policy meeting.
Meanwhile, the commentary from Swiss National Bank (SNB) Vice Chairman Martin Schlegel failed to provide strength to the Swiss franc. SNB Schlegel cited the central bank is "still willing" to be active in the foreign currency markets in pursuing its goal of price stability.
USD/CHF is testing the breakout of the downward-sloping trendline placed from November 21 high around 0.9600 on a four-hour scale. Usually, a test of a trendline breakout with an absence of solid downside pressure indicates the strength of bulls and prepares a platform for a confident upside move ahead.
The Swiss Franc asset is employing efforts to shift its auction above the 200-period Exponential Moving Average (EMA) at 0.9245.
Meanwhile, the Relative Strength Index (RSI) (14) has failed to sustain in the bullish range of 60.00-80.00. A bullish momentum will be triggered if the momentum oscillator manages to reclaim the 60.00-80.00 range.
For a fresh upside, the Swiss Franc asset needs to deliver a confident break above February 6 high around 0.9290, which will drive the asset towards January 12 high at 0.9363 followed by January 6 high at 0.9410.
In an alternate scenario, a breakdown below February 9 low at 0.9161 will drag the asset towards the round-level support at 0.9100. A slippage below the latter will drag the asset towards February low at 0.9059.
USD/CHF four-hour chart
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