US Dollar Forecast: USD/CHF Rally Eyes July High

US Dollar Outlook: USD/CHF

USD/CHF may further retrace the decline from the July high (0.9051) as it trades to a fresh monthly high (0.8938), with the recent rally in the exchange rate starting to push the Relative Strength Index (RSI) into overbought territory.

US Dollar Forecast: USD/CHF Rally Eyes July High

USD/CHF extends the advance from the weekly low (0.8801) to carve a series of higher highs and lows, and the move above 70 in the RSI is likely to be accompanied by a further advance in the exchange rate like the price action from earlier this year.

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In turn, USD/CHF may appreciate over the remainder of the month as it trades above the 200-Day SMA (0.88220) for the first time since July, and data prints coming out of the US may keep the exchange rate afloat as the US Personal Consumption Expenditure (PCE) Price Index is anticipated to show sticky inflation.

US Economic Calendar

Looking ahead, the headline reading is projected to increase another 0.3% in October, while the core PCE, the Federal Reserve’s preferred gauge for inflation, is anticipated to rise 0.2% during the same period.

In turn, signs of persistent price growth may generate a bullish reaction in the US Dollar as it puts pressure on the Fed to further combat inflation, but a softer-than-expected PCE report may curb the recent rally in USD/CHF as it encourages the central bank to further unwind its restrictive policy.

With that said, failure test July high (0.9051) may pull the RSI back from overbought territory, but USD/CHF may continue to trade to fresh monthly highs as the exchange rate is on track to mark a six-week rally for the first time since 2023.

USD/CHF Price Chart – Daily

Chart Prepared by David Song, Strategist; USD/CHF Price on TradingView

USD/CHF is on track to close above the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone for the first time since July, with a breach above the 0.9030 (38.2% Fibonacci extension) to 0.9040 (23.6% Fibonacci extension) region bringing the July high (0.9051) on the radar.
Next area of interest comes in around 0.9180 (23.6% Fibonacci extension) but lack of momentum to test the July high (0.9051) may curb the bullish price series in USD/CHF.
Failure to hold above the 0.8880 (38.2% Fibonacci retracement) to 0.8910 (38.2% Fibonacci extension) zone may push USD/CHF back towards the 0.8770 (61.8% Fibonacci extension) to 0.8800 (50% Fibonacci extension) region, with the next area of interest coming in around 0.8700 (61.8% Fibonacci extension).

Additional Market Outlooks

GBP/USD Selloff Pushes RSI Up Against Oversold Zone

USD/JPY Weakness Curbs Threat of Currency Intervention

US Dollar Forecast: AUD/USD Recovery Keeps Yearly Range Intact

USD/CAD Rally Unravels to Pull RSI Back from Overbought Zone

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

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