USD/CHF strengthens toward the 0.9000 level as traders await the US PCE data release
FUNDAMENTAL OVERVIEW:
- USD/CHF advances to approximately 0.8995 in early European trading on Friday.
- President Trump confirmed that tariffs on Mexico and Canada will take effect on March 4.
- However, prevailing risk-off sentiment and increased safe-haven demand for the Swiss Franc may limit further upside for the pair.
USD/CHF trades in positive territory near 0.8995 in early European trading on Friday, supported by a stronger US Dollar following President Trump’s latest tariff remarks. Market focus now shifts to the US Personal Consumption Expenditures (PCE) Price Index for January, a key inflation gauge.
The Greenback gained momentum after Trump reaffirmed that 25% tariffs on Mexican and Canadian goods will take effect on March 4, citing continued drug inflows into the US. Additionally, he announced an extra 10% duty on Chinese imports.
Uncertainty over the Federal Reserve’s rate-cut trajectory persists, with markets pricing in 58 basis points of easing by year-end. Cleveland Fed President Beth Hammack signalled a pause in rate adjustments, while Philadelphia Fed President Patrick Harker supported maintaining the current policy stance.
On the Swiss side, softer January inflation data has raised expectations of a potential Swiss National Bank (SNB) rate cut in March. Consumer inflation eased to 0.4%, its lowest in nearly four years. However, escalating geopolitical tensions in the Middle East could bolster safe-haven demand for the Swiss Franc, potentially capping USD/CHF’s upside.
USD/CHF TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
USD/CHF is trading within a Down channel.
USD/CHF is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 0.9030
Immediate support level: 0.8993
HOW TO TRADE USD/CHF
After a period of downward movement, USD/CHF found support and respected the zone, triggering a reversal to the upside. The pair has since broken through a key resistance level with a strong bullish candle. Following this breakout, a pullback is likely before USD/CHF resumes its upward trajectory toward the next resistance zone.
TRADE SUGGESTION- LIMIT BUY – 0.9001, TAKE PROFIT AT- 0.9048, SL AT- 0.8975.