As Bearish Strength Fades, USDCHF Sets Up Potential Bullish Continuation

Forex

Economic

Summary:

The bullish trend continues to dominate, meaning pullbacks to key zones could offer opportunities to align with the uptrend targeting the 0.8239 area

BUY USDCHF

EXP

PENDING

0.80650

Entry Price

0.82390

0.79800

0.81223 +0.00203 +0.25%

Pips

PENDING

0.79800

Exit Price

0.80650

Entry Price

0.82390

Trade relations between the United States and Canada strained once again after the White House announced a new 50% tariff on most Canadian products. The measure, driven by President Donald Trump, comes in response to what Washington views as discriminatory treatment by Canada toward U.S. sectors such as automotive, alcoholic beverages, and dairy products.

At the same time, the geopolitical situation in the Middle East continues to deteriorate. President Trump stated that Iran will "pay" for the deaths of three American soldiers, while United States Central Command (CENTCOM) confirmed a new round of strikes against Iranian targets. The operations mark the tenth consecutive day of military offensives, keeping risks elevated for energy markets and regional stability.

On the monetary front, investors continue to evaluate the path of the Federal Reserve (Fed). Although more moderate inflation data have reduced the probabilities of a rate hike at the July meeting, markets continue to price in at least one additional increase before the end of the year.

Remarks from several Fed officials have reinforced this perception. Cleveland Fed President Beth Hammack warned that higher interest rates might be necessary to contain persistent inflationary pressures, joining other central bank members who maintain a cautious stance regarding price developments.

In Switzerland, data from the Swiss National Bank (SNB) showed that foreign exchange reserves increased to CHF 759 billion in June, up from CHF 711 billion recorded in May. This development suggests greater activity by the monetary authority in foreign exchange markets aimed at limiting an excessive appreciation of the Swiss franc.

On the other hand, the labor market showed signs of moderation. The unemployment rate rose unexpectedly to 3.1% in June, reaching its highest level in nearly five years. This result supports expectations for the SNB to maintain an accommodative monetary stance over coming months, amid moderate growth and contained inflationary pressures. As Bearish Strength Fades, USDCHF Sets Up Potential Bullish Continuation_1

As Bearish Strength Fades, USDCHF Sets Up Potential Bullish Continuation_1

Technical Analysis

USDCHF has consolidated near the support level of 0.8042, which previously acted as resistance. With this shift, we can observe that the bullish trend continues to dominate, meaning pullbacks to key zones could offer opportunities to align with the uptrend targeting the 0.8239 area, where the 1.0 Fibonacci expansion is located. Meanwhile, the 100 and 200-period moving averages sit at 0.7857 and 0.7872, respectively, with the 100-period aligning with the support zone. Consequently, it would also offer dynamic support in this area, which could push bulls to retake control for a new upward impulse.

Looking at the oscillators, the RSI dropped briefly to the 38 level without entering oversold territory, avoiding a lower RSI low while price consolidates upward, signaling that downside strength is fading rapidly. Meanwhile, the MACD shows a histogram that has just crossed into positive territory, while the signal lines hover just above the neutral zone. Therefore, the corrective move could be coming to an end, paving the way for a renewed bullish impulse.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8065

Target price: 0.8239

Stop loss: 0.7980

Validity: Jul 31, 2026 15:00:00

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As Bearish Strength Fades, USDCHF Sets Up Potential Bullish Continuation

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