USDCHF Trade Idea: Bullish Outlook as Dovish SNB Chairman Signals Interventions

The pair surged sharply on board-based US dollar buying. Overall bias remains bullish as long as support 0.8780 holds. It hit a high of  0.89180 yesterday and is currently trading around 0.88586.

Today, Swiss National Bank (SNB) Chairman Martin Schlegel spoke about the bank's monetary policy and managing the Swiss economy. He stated that the SNB is ready to lower interest rates further if needed to keep prices stable and may intervene in foreign exchange markets. The key rate is now at 1% after three consecutive cuts, and he noted that inflation has decreased to around 1.1%, which could drop below the bank’s target range. Schlegel highlighted the challenges posed by a strong Swiss franc but sees it as a chance for companies to improve their efficiency. He also mentioned that negative interest rates could be an option again if necessary.

Technical Analysis

The pair is currently trading below the 34- and above 55-EMA on the 4-hour chart.

Near-Term Resistance: Current resistance is at 0.8920. A break above this level could lead to targets at 0.9000/0.90480. The break above 0.87500 confirms that the decline from 0.9225 got completed at 0.83750.

Immediate Support: The next support level is at 0.8850. If this level is broken, the pair could drop to 0.8780/0.8720/0.8700/0.8660/0.8600/0.8580, 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 0.88925-950, with a stop loss set at 0.8840 and aiming for a target price of 0.9000.