USD/CHF Rate Falls Over 1% After SNB Chief's Statements
As evidenced by the USD/CHF chart, yesterday one US dollar was worth 0.913 Swiss francs, but today it is already 0.903, indicating a rate drop of approximately 1%.
According to MT Newswires, the franc's strengthening is attributed to statements by Swiss National Bank (SNB) President Thomas Jordan. In his view, an overly weak franc is the most likely source of higher inflation in Switzerland.
Notably, since the beginning of 2024, the Swiss franc has weakened against the US dollar by more than 7%, one of the worst performances among G10 currencies. The exchange rate has formed an ascending trend channel (indicated in blue).
Today's USD/CHF chart shows two important resistance lines:
The 0.913 level the price could not consolidate above this level despite several attempts;
The median line of the channel.
On May 22, a downward reversal occurred from this resistance block (indicated by an arrow), and today the USD/CHF price is near the lower boundary of the channel.
Bullish arguments:
Near the lower boundary of the channel, demand may increase;
The psychological level of 0.9 CHF per 1 USD may provide support this has occurred several times during the spring.
It is likely that the SNB does not want the upward trend to continue, and if so, in the near future, we might see a consolidation in the USD/CHF market within the range of 0.900 0.913, until significant fundamental news emerges to disrupt the balance that has been forming since April.
Read more: https://fxopen.com/blog/en/oa-usd-chf-rate-falls-over-1-after-snb-chiefs-statements/
Text source: Forex Trading Blog
