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Swiss CPI rose slightly beyond expectations, what is the rebound space of the US dollar/CHF?
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Review]: Swiss CPI rose slightly beyond expectations, what is the rebound space of the US dollar/ Swiss franc?". Hope it will be helpful to you! The original content is as follows:
On Thursday (July 24), the US dollar/CHF fluctuated higher, and trading around 0.7940 during the European session. The market temporarily avoided safe-haven assets due to the new European and American trade consensus, and the Swiss franc was under pressure to decline; but the uncertainty of fundamentals and the subtle evolution of technical structure have left the short-term suspense.
Brands:
This week's market focus is on the new trade agreements that Europe and the United States are about to reach. According to the Financial Times, the United States and the European Union are promoting new tariffs of 15% on some EU imported goods, indicating that the trade stance between the two sides is eased. At the same time, US President Trump announced that he had reached preliminary tariff arrangements with Japan, covering a new tax rate of 15%, further consolidating support from the dollar.
The cooling of risk aversion directly affects the performance of the Swiss franc. While waiting for the release of S&P global PMI data in July, traders also began to reevaluate the Swiss National Bank's future policy path. Although Switzerland's June CPI rose only 0.1% year-on-year in recent years, the monthly increase reached 0.2%. The market expects the Swiss National Bank to delay the pace of easing, which still supports the Swiss franc in the medium and long term.
On the other hand, US Treasury Secretary Scott Bessent recently stated that the successor of the Federal Reserve Chairman will be finalized in December or early next year, and "is not in a hurry to appoint." This statement eased previous concerns about the independence of the Federal Reserve and helped the US dollar stabilize. Traders are currently focusing on next week's FAP meeting, with the market generally expected to keep interest rates unchanged, and October may be a key window for policy adjustments.
Trump's latest statement at the Washington AI Summit is also worthy of vigilance. He clearly proposed that the minimum starting point for a xm-links.comprehensive tariff benchmark is15%, implementing more direct tax burden measures for most trading partners. This attitude exacerbates medium-term trade uncertainty and may cause market risk aversion demand to rise again in the future.
Technical:
The chart shows that the US dollar/Schwanstein exchange rate has formed a significant downward trend since its high of 0.8475, and has recently obtained phased support around 0.7871. The middle rail of the Bollinger band is currently located near 0.7993, the price is running below the middle rail, and the Bollinger band is in a converging state, implying that the volatility is shrinking and the market is about to face directional choices.
Looking at the short term, the current price oscillates around the lower track of the Bollinger band (0.7847). Although the MACD indicator still runs below the zero axis, the red column appears, and the DIFF line is slightly higher than the DEA line, forming a slight golden cross, and there may be a technical rebound demand in the short term. In terms of K-line pattern, the price forms a sideways range. Analysis believes that if the upper edge of this area is broken by 0.8090, further rebound space may be opened, and the resistance is focused on the upper rail of the Bollinger band 0.8139;
The relative strength indicator (RSI) runs around 40.2 and has not yet left the edge of oversold, but has risen slightly, reflecting that the current long and short forces are in a balanced manner; if the RSI can continue to rise and stand above 50, it can be regarded as a signal of improvement in short-term market sentiment.
Overall, the analysis believes that the exchange rate is currently in a sideways consolidation stage in a downward trend, with short-term support at 0.7871, and resistance is focused on 0.8090 and 0.8139. The future market direction needs to pay close attention to the Bollinger Band breakthrough and MACD kinetic evolution.
Prevention of market sentiment:
From the current market environment, the phased rebound of the US dollar/CHF is more driven by the cooling of risk aversion sentiment. Expectations of easing trade between Europe and the United States, as well as expectations of policy continuity for the handover of the Federal Reserve Chairman, have supported the US dollar, while the Swiss franc's safe-haven attributes have been suppressed in the short term.
However, Trump's new tariff benchmark is 15%-50%, showing that his tough trade stance has not changed. If this policy tendency is implemented, it will once again push up market demand for hedging risks and provide potential support for the Swiss franc. In addition, the slight rebound in Swiss CPI may delay the further easing of the Swiss National Bank, which also prompts some funds to expect the Swiss franc to remain stable in the medium and long term.
Therefore, market sentiment is currently in a stalemate for long and short periods, and there are recurring short-term demand for safe-haven assets. Traders tend to remain cautious before European and American data and policies are further clarified, and the US dollar/Cherro Franc exchange rate has also entered a volatile pattern accordingly.
Future Outlook:
Short-term Outlook:
Analysts believe that if the US dollar/CHF subsequently breaks through the 0.8090 resistance and stabilizes near the upper track of the 0.8139 Bollinger Band, it may be regarded as a short-term trend reversal signal. Technical aspects: MACD golden cross appears and RSI is a moderate rise, which is a mild signal of short-term long. If the US-European trade environment continues to ease, the US dollar is expected to continue its recovery momentum, and the Swiss franc may continue to be under pressure;
But traders are wary of the current sideways once the sideways range breaks down, especially if the key support of 0.7871 is lost, it may trigger the shorts to continue the market, and the exchange rate will test a lower platform to start a new round of downward trend; at that time, the resurgence of safe-haven demand and concerns about global policy uncertainty may push up the demand for the Swiss franc again.
Medium- and long-term outlook:
In the medium- and long-term perspective, analysis believes that whether the US dollar/CHF really forms a reversal still needs to pay attention to two major variables: one is the sustainability of US economic data. If PMI and inflation strengthen, the probability of the US dollar remaining strong is high; the other is whether the Swiss National Bank delays monetary easing policy, and if the inflation recovery trend is established, the medium- and long-term support of the Swiss franc will be enhanced.
The above content is all about "[XM Foreign Exchange Market Review]: Swiss CPI rose slightly beyond expectations, what is the rebound space of the US dollar/ Swiss franc?", which was carefully xm-links.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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