USD/CHF Price Forecast: 20-day EMA continues to act as key barrier for US Dollar bulls

USD/CHF trades cautiously around 0.7925 ahead of Fed Chair Powell’s speech.
The Fed lowered interest rates last week amid growing US labor market concerns.
Investors expect the SNB to hold interest rates steady at 0% on Thursday.

Sagar Dua FXStreet

The USD/CHF pair trades subduedly around 0.7925 during the late European trading session on Tuesday. The Swiss Franc pair trades with caution as the US Dollar (USD) demonstrates sluggishness ahead of the speech from Federal Reserve (Fed) Chair Jerome Powell at 16:35 GMT.

Investors will pay close attention to Fed Powell’s speech to get fresh more cues on the monetary policy outlook. Market participants would like to know about whether the Fed will continue reducing interest rates even as inflationary pressures remain well above the central bank’s target of 2%.

Last week, the Fed reduced interest rates by 25 basis points (bps) to 4.00%-4.25% and signaled more amid slowing United States (US) labor market.

In Tuesday’s session, investors will also focus on the preliminary US S&P Global PMI data for September.

This week, the major trigger for the Swiss Franc (CHF) will be the Swiss National Bank’s interest rate decision on Thursday. The SNB is expected to hold interest rates steady at zero level.

USD/CHF continues to face selling pressure near the 20-day Exponential Moving Average (EMA), which trades around 0.7964.

The 14-day Relative Strength Index (RSI) wobbles inside the 40.00-60.00 range, suggesting a sharp volatility contraction.

The pair could witness a fresh downside move towards 0.7800, if it breaks below the September 17 low of 0.7829.

In an alternate scenario, a recovery move by the pair above the August 1 high of 0.8170 will open the room for more upside towards the June 19 high of 0.8215, followed by the June 6 high of 0.8248.

USD/CHF daily chart

Economic Indicator

Fed's Chair Powell speech

Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

EUR/USD advances as US-Iran peace deal weighs on US Dollar

EUR/USD rises after registering minor losses in the previous day, trading around 1.1610 during the Asian hours on Monday. The pair appreciates as the US Dollar declines amid easing risk aversion following the reports that the United States and Iran agree on a peace deal to end the war and reopen the Strait of Hormuz.

GBP/USD rises as market sentiment improves on US-Iran peace deal

GBP/USD gains ground after registering minor losses in the previous day, trading around 1.3450 during the Asian hours on Monday. The pair rises as the US Dollar declines amid easing risk aversion following the reports that the United States and Iran have agreed on a peace deal to end the war and reopen the Strait of Hormuz.

Gold: US-Iran peace deal bolsters recovery as eyes turn to Fed

Gold is at its highest level in four days early Monday, above $4,300, extending the bullish opening gap and the recent recovery. The bright metal kicks off a new week with a bang, having hit year-to-date lows near the $4,000 threshold last week.

Bitcoin consolidates gains, Ethereum defends support, XRP nears breakout trigger

Bitcoin, Ethereum and Ripple begin the week on a constructive note as the top three cryptocurrencies attempt to extend rebounds after recovering nearly 4%, 2% and 2.6%, respectively. BTC steadies around $65,600, ETH continues to hold firmly above the key $1,700 support, while XRP nears the upper boundary of the falling channel pattern.

BoJ set to hike, but will it save the Yen?

The Bank of Japan is poised to hike interest rates for the fifth time in this tightening cycle on Tuesday, taking the policy rate from 0.75% to 1.00%. As has become customary for BoJ rate hikes lately, the hawkish rhetoric has been intensifying in the run up to the meeting, with Governor Ueda essentially locking in the move in his last appearance on June 3.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.