Bearish Reaction Could Develop at New Resistance Zone

Manuel

Forex

Economic

Summary:

These levels have not been seen in recent months and may signal that bullish momentum is beginning to lose strength.

SELL USDCHF

EXP

PENDING

0.83380

Entry Price

0.81310

0.84200

0.83212 +0.00022 +0.03%

Pips

PENDING

0.81310

Exit Price

0.83380

Entry Price

0.84200

The Swiss National Bank (SNB) left its benchmark interest rate unchanged at 0%, in line with market expectations. The central bank slightly revised its inflation forecasts higher and now expects consumer prices to increase by 0.7% this year and by 0.8% in both 2027 and 2028. Despite the upward revision, policymakers continue to believe that medium-term inflationary pressures have only increased modestly and still expect inflation to rise during the fourth quarter before gradually easing throughout 2027.

SNB Chairman Martin Schlegel stated that the recent depreciation of the Swiss Franc has been partly driven by widening interest-rate differentials between Switzerland and other major economies. He noted that Switzerland’s relatively low interest rates make the currency less attractive compared with both the Euro and the US Dollar (USD). Schlegel also reiterated that the SNB remains willing to intervene in the foreign exchange market if conditions require such action.

At the same time, the central bank maintained a cautious assessment of the economic outlook. Policymakers continue to view developments in the global economy as the main source of risk for Switzerland, particularly amid tensions in the Middle East, uncertainty surrounding international trade policies, and ongoing exchange-rate fluctuations. SNB Governing Board member Petra Tschudin noted that Swiss Gross Domestic Product (GDP) growth was exceptionally strong during the second quarter, supported in part by solid activity in the chemical and pharmaceutical sectors. However, the SNB expects economic growth to moderate over the coming quarters.

Financial markets began the week under renewed volatility following conflicting reports regarding a potential agreement between the United States and Iran. Initial reports from Al Hadath suggested that Iran had agreed to halt its uranium enrichment program, raising hopes that geopolitical tensions could ease. However, those reports were later denied by Press TV, which stated that Tehran’s position remains unchanged. Adding further uncertainty, U.S. President Donald Trump rejected on Saturday the possibility of an agreement with Iran aimed at reopening the Strait of Hormuz, keeping geopolitical concerns firmly in focus.

Against this backdrop, U.S. Treasury yields continued their advance. The benchmark 10-year Treasury yield climbed to 5.27%, its highest level since June 2007, before giving back part of its gains and stabilizing near 5.23%. The move reflects persistent concerns regarding inflation, monetary policy expectations, and geopolitical developments.

Federal Reserve officials have also continued to express concern about elevated inflation, reinforcing expectations that interest rates may remain higher for longer or move further upward if necessary. Fed Governor Lisa Cook adopted a notably hawkish tone, warning that inflationary pressures could remain persistent in the coming months due to the growing impact of artificial intelligence-related investment and ongoing hostilities in the Middle East.

Market participants will also be closely watching several key U.S. economic releases this week, including the Personal Consumption Expenditures (PCE) inflation report on Wednesday, the ISM Purchasing Managers’ Index (PMI) on Thursday, and the Nonfarm Payrolls (NFP) report on Friday. These releases could play an important role in shaping expectations for future Federal Reserve policy decisions. Bearish Reaction Could Develop at New Resistance Zone_1

Bearish Reaction Could Develop at New Resistance Zone_1

Technical Analysis

USDCHF is approaching its first major resistance level at 0.8337 following the recent bullish breakout above 0.8131. If price shows a bearish reaction after reaching this resistance zone, a corrective move could begin and potentially target the 0.8131 area, which has now shifted from resistance to support. This level is also located near the 0.50 Fibonacci retracement, adding additional technical significance to the zone. Meanwhile, the 100-period and 200-period moving averages are positioned at 0.8059 and 0.7951 respectively, providing dynamic support and potentially aligning with the downside target area should a deeper correction develop.

Looking at the oscillator area, the RSI recently climbed to 72, moving clearly into overbought territory on the daily chart. These levels have not been seen in recent months and may signal that bullish momentum is beginning to lose strength. At the same time, the MACD continues to display a bullish histogram, although its depth remains relatively limited. The signal lines remain in bullish territory as well, but with less strength than during previous upward moves. Taken together, these conditions suggest that a corrective pullback could be approaching as the pair tests a new resistance zone.

Trading Recommendations

Trading direction: Sell

Entry price: 0.8338

Target price: 0.8131

Stop loss: 0.8420

Validity: Oct 09, 2026 15:00:00

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Bearish Reaction Could Develop at New Resistance Zone

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