Swiss Franc Technical Forecast: USD/CHF Breakout Looms

Swiss Franc Technical Forecast: USD/CHF Weekly Trade Levels

• USD/CHF rebound off support exhausts into downtrend, multi-week range in view
• USD/CHF breakout potential into June open- U.S. Core PCE, Non-Farm Payrolls on tap next week
• Resistance 8406/16 (key), 8555, 8729/57- Support 8206, 8103 (key), 7769

USD/CHF is trading just below downtrend resistance with price holding within a five-week range into the close of the month. The focus is on a potential breakout into the monthly cross with key US inflation and employment data on tap next week. Battle lines drawn on the USD/CHF weekly technical chart.

Swiss Franc Price Chart – USD/CHF Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/CHF on TradingView

Technical Outlook: In my last Swiss Franc Technical Forecast we noted that USD/CHF had, “rebounded off downtrend support with the recovery now testing initial resistance. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to the weekly low IF price is heading higher on this stretch with a close above the 8416 needed to fuel the next major leg of the advance.” USD/CHF rallied more than 5.4% off the yearly lows and although price registered an intraweek high at 8476, the bulls failed to mark a weekly close above.

The subsequent pullback is rebounding this week off the 61.8% retracement of the recent recovery at 8206 and the focus is on this recovery just below confluent resistance at 8406/16- a region defined by the 2024 low-close, the 2023 low-week close (LWC) and the 2024 yearly open. Look for a break of this range for guidance in the days ahead.

A topside breach would suggest a more significant low was registered last month / a larger trend reversal is underway. Subsequent resistance objectives at the July 2023 low at 8555 and the 52-week moving average / 61.8% retracement / 2021 low at 8730/57. Broader bearish invalidation remains unchanged at the 78.6% retracement of the yearly range at 8953.

A break below the 82-handle exposes key support again at the 61.8% extension of the 2022 decline at 8103. Ultimately, a break below the 25% parallel would be needed to mark downtrend resumption / fuel the next major leg of the decline. Subsequent support objectives rest at the 2011 LWC at 7769 and the 2011 low close at 7670- both areas of interest for possible downside exhaustion / price inflection IF reached.

Bottom line: A rebound off downtrend support has exhausted into the median-line and the immediate focus is on a breakout of the 8206-8416 range for guidance. From a trading standpoint, rallies should be limited to this week’s high IF price is heading lower this stretch with a close below 8206 needed to fuel another test of the lows.

Keep in mind we get the release of key U.S. inflation data into the monthly cross with Non-Farm Payrolls on tap next week. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest Swiss Franc Short-term Outlook for a closer look at the near-term USD/CHF technical trade levels.

USD/CHF Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex