The pair jumped more than 50 pips after SNB's dovish rate cut. Overall bias remains bullish as long as support 0.8780 holds. It hit a high of 0.88949 at the time of writing and is currently trading around 0.88776.
On December 12, 2024, the Swiss National Bank (SNB) cut its key interest rate by 0.50 percentage points, lowering it from 1.0% to 0.5%, the lowest since November 2022. This unexpected decision was made to address low inflation at 0.7% and a strong Swiss franc that hurts exports. The SNB aims to support the economy amidst weak global demand and signals that further rate cuts may be needed if inflation stays low. This move shows the SNB’s commitment to keeping prices stable in a challenging economic situation.
Technical Analysis
The pair is currently trading above the 34- and above 55-EMA on the 4-hour chart.
Near-Term Resistance: Current resistance is at 0.8900. A break above this level could lead to targets at 0.8960/ 0.9000/0.90480. The break above 0.87500 confirms thatthe decline from 0.9225 was completed at 0.83750.
Immediate Support: The next support level is at 0.8830. If this level is broken, the pair could drop to 0.8780/0.8750/0.8720/0.8700/0.8660/0.8600/0.8580, 0.8550, 0.8525, 0.8499, 0.8440, 0.8420, 0.8390, 0.8365 (61.8% Fibonacci projection), or even 0.8340.
Indicator Analysis (4-hour chart)
- CCI (50): Bullish
- Average Directional Movement Index: bullish
Overall, the trend remains bullish
Trading Recommendation
Consider buying on dips around 0.8838-40, with a stop loss set at 0.8780 and aiming for a target price of 0.9000.
