USD/CHF Forecast

The USD/CHF currency pair has been experiencing significant market activity in recent weeks, influenced by technical and fundamental factors. Recent exchange rate movements suggest that a near-term corrective consolidation phase lower may be followed by a notable rally as underlying economic data and central bank policies continue to shape market sentiment. 

Swissie traders are now keenly watching key nearby resistance and support levels for potential breakout opportunities, especially to the upside where a major medium-term trendline has just been tested and could give way shortly. 

In this article, Benzinga provides an in-depth analysis of the current market conditions for USD/CHF, explores technical and fundamental perspectives for the currency pair and presents a detailed USD/CHF forecast for the pair’s future direction, so let’s dive in now!

Current Market Analysis

This section provides an overview of recent exchange rate movements in the USD/CHF currency pair, including factors influencing the market such as economic data, central bank policies and geopolitical events.

The USD/CHF pair has demonstrated strength in recent sessions, maintaining its position above key support levels. Currently trading around 0.9135, the pair has been consolidating within the 0.8965-0.9206 range but now seems poised for an upside breakout. Market participants have observed resilience in the U.S. dollar, driven by economic data and evolving central bank policies.

From a fundamental perspective, the U.S. dollar has gained momentum due to President Donald Trump's newly imposed tariffs on imports from Mexico, Canada and China. These measures have reinforced a bullish sentiment toward the USD/CHF pair. In addition, U.S. bond yields have rebounded, further supporting the dollar’s recent strength.

In contrast, the Swiss franc has faced downward pressure, mainly due to the Swiss National Bank’s (SNB) cautious monetary policy stance. While the SNB has not implemented negative interest rates yet, it has indicated a willingness to do so if inflation remains subdued. Furthermore, Switzerland's projected budget deficits of around three billion Swiss francs in the coming years highlight potential economic challenges.

Key Factors Influencing the USD/CHF Market

Several significant factors are currently impacting the USD/CHF exchange rate:

• Trade Policy: President Donald Trump's newly implemented tariffs on imports from Mexico, Canada and China have strengthened the U.S. dollar, contributing to a bullish outlook for the USD/CHF pair. Trade tensions can drive demand for safe-haven assets like the Swiss franc. Still, in this case, the USD has gained momentum due to investor and trader confidence in the U.S. economy going forward under the Trump administration.
  
• Central Bank Policies: The Federal Reserve's monetary policy stance remains a key factor for this pair, with the recent 2.6% increase in the U.S. Personal Consumption Expenditures (PCE) Price Index reinforcing expectations of tighter U.S. monetary policy. In contrast, the Swiss National Bank (SNB) has indicated a willingness to implement negative interest rates if inflation remains low, a dovish stance contributing to CHF weakness.
  
• Economic Data: Recent U.S. economic data, such as the recovery in bond yields and stronger-than-expected inflation, has supported the USD. On the Swiss side, the 2.6% rise in Real Retail Sales suggests economic resilience, which could limit USD/CHF gains in the near term. Meanwhile, Switzerland’s forecast budget deficits could put further pressure on the CHF in the long run.

Technical Analysis

This section provides a technical analysis of key support and resistance levels and other technical factors for the USD/CHF pair. A daily chart for the pair’s exchange rate appears below.

Daily exchange rate candlestick chart of the USD/CHF currency pair showing the 50 and 100 period moving averages in blue and orange respectively, a key trendline in red, and the 14 period RSI in the indicator box below the chart. Source: Metatrader5.

From a technical standpoint, the USD/CHF pair has surpassed key resistance levels, with the next major resistance level identified at 0.9180. A sustained move above this level could pave the way for further gains. However, a major declining trendline, drawn through the highs of 0.9201, 0.9224 and 0.9245, currently sits at 0.9202, presenting a substantial resistance zone. 

Also, the exchange rate remains above its 50 and 100-day moving averages, while the pair’s 14-day RSI is rising but not yet in overbought territory. This clears the way for further medium-term gains for the USD/CHF pair. 

Elliott Wave Theory analysis indicates that the pair has been in an impulsive five-wave upward movement since the Sept. 6, 2024, low of 0.8373, culminating in a high of 0.9201 on Jan. 12, 2025. This suggests that the pair is now undergoing a corrective pullback phase within the broader bullish trend that should shortly resume with a strongly bullish third of a third wave. 

An initial Wave A within a bearish Wave 2 of three has likely already taken place, with an expected B wave upwards followed by a C wave decline that should dip briefly below the bottom of A at 0.8965. The invalidation level for this structure is the 0.8373 low. If breached, it would require a reassessment of the current bullish market outlook for USD/CHF.

Fundamental Analysis

The following sections examine economic indicators and geopolitical events affecting the USD and CHF that could significantly impact the currency pair's future direction. 

USD Outlook

• The U.S. economy has seen rising inflation, with the Personal Consumption Expenditures (PCE) Price Index increasing by 2.6% year-over-year in December. This aligns with market expectations and reinforces the likelihood of a tighter monetary policy by the Federal Reserve, which typically strengthens the U.S. dollar.
• U.S. bond yields have recovered, supporting the USD’s upward movement.
• Trade restriction policies, including tariffs on major trading partners imposed by incoming U.S. President Donald Trump, have contributed notably to the dollar’s bullish momentum.

CHF Outlook

• The SNB has maintained a neutral policy stance, but it has also signaled a readiness to introduce negative interest rates if inflation remains low. This dovish approach has weakened the Swiss franc.
• Swiss Real Retail Sales rose by 2.6% year-over-year in December, exceeding expectations and indicating some strength in the Swiss economy. This could counterbalance recent CHF depreciation.
• The Swiss government’s projected budget deficit of three billion francs annually signals potential economic hurdles that could affect the Swiss franc’s relative value versus the USD.

Forecast for the USD/CHF Pair

Considering both technical and fundamental factors, the USD/CHF pair is expected to trade within a range of 0.9050 to 0.9202 soon. A breakout above the nearby mildly declining trendline, currently situated at 0.9202, should trigger further upside momentum for the pair, particularly if economic data and geopolitical activity continue to support a bullish U.S. dollar outlook.

From an Elliott Wave perspective, the current correction phase will likely give way to notable renewed bullish momentum as a sharply rising third of a third wave unfolds. Swissie traders should closely monitor key levels, especially the wave count invalidation level of 0.8373, to adjust their positions accordingly.

USD/CHF Market Seems Poised for an Upside Breakout

Overall, the USD/CHF pair remains in a critical phase, with technical indicators, including trendline and wave analysis and fundamental data aligning to suggest substantial potential upside movement contingent on a major nearby trendline break occurring. 

Swissie traders should pay close attention to resistance levels around 0.9180 and 0.9202 and any economic data releases that could impact central bank monetary policy decisions.

For those looking to capitalize on these market movements, premier online forex trading platforms like FOREX.com provide the tools, pricing and insights traders need to effectively operate in the forex market. These include advanced trading tools, real-time market data and competitive dealing spreads. Stay informed and trade wisely to maximize USD/CHF market action in the coming weeks.