The USDCHF is trading up 0.12% on the day, putting the pair on track for its sixth consecutive daily gain. The rally has carried the price from a recent low of 0.81822 to yesterday’s high of 0.83580, a gain of approximately 2.15%, or 176 pips.
That is a solid move in a short period of time. However, the buyers have now reached a level where they need to prove they can keep the momentum going.
Policy divergence supports the dollar
Fundamentally, the Swiss National Bank left rates unchanged at its latest meeting. In contrast, the Federal Reserve raised rates by 25 basis points and signaled that another hike could come before year-end.
With the market pricing in around a 40% chance of an October hike and a near-100% chance of a hike by year-end, the policy divergence provides a supportive backdrop for the dollar against the Swiss franc.
But a supportive fundamental story does not eliminate the potential for a technical correction—particularly after six days of gains and with the price testing a key resistance level.
Buyers have tested resistance twice. Can they stay above?
Yesterday’s rally reached 0.83580, briefly taking the price above the May 29, 2025 high at 0.83485. However, buyers could not sustain the break, and the pair closed back below that level.
Today, buyers had another shot. The price pushed above 0.83485 to an intraday high of 0.83540, but again backed off. The pair is now trading right around that old high as traders weigh the next move.
Does the rally extend, or is the pair ready for a corrective move lower?
For buyers, the requirement is straightforward: get above 0.83485 and stay above. A move through today’s high at 0.83540 and yesterday’s high at 0.83580 would strengthen the bullish case and open the door toward 0.8400.
That level is both natural round-number resistance and the 50% midpoint of the decline from the February 2025 high to the January 2026 low, making it the next key upside target.
What would give sellers more control?
If resistance continues to hold, the first important downside test comes against the rising 100-hour moving average at 0.83134.
A pullback toward that moving average would give buyers an opportunity to defend the trend. Hold above it, and they retain the technical advantage.
However, a break below 0.83134—and sustained trading below—would give sellers more control and increase the potential for a deeper correction toward the rising 200-hour moving average at 0.82699.
Key technical levels to eye
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0.84000: 50% retracement and round-number resistance.
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0.83580: Yesterday’s high.
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0.83540: Today’s high.
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0.83485: May 29, 2025 high and immediate pivot.
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0.83134: Rising 100-hour moving average; first key downside support.
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0.82699: Rising 200-hour moving average; next corrective target.
Beginner trader takeaway
A price can briefly move above resistance without confirming a breakout. Yesterday and today, the USDCHF traded above 0.83485, but each move attracted selling.
That is why I emphasize “break and stay above.” The break shows buyers are trying. Staying above shows they are succeeding.
The buyers still have the trend in their favor. Now they need to turn 0.83485 from resistance into support to keep the run going.
This article was written by Greg Michalowski at investinglive.com.