Key Resistance Zone Could Trigger a New Leg Lower in USDCHF

Central Bank

Economic

Summary:

If the trendline holds as resistance, a renewed bearish move could follow, with the 0.8476 level standing out as the next significant support zone.

SELL USDCHF

EXP

EXPIRED

0.85750

Entry Price

0.84800

0.86250

0.80254 -0.00068 -0.08%

Pips

EXPIRED

0.84800

0.81937

Exit Price

0.85750

Entry Price

0.86250

U.S. President Donald Trump announced on Wednesday that the United States would suspend reciprocal tariffs for 90 days on countries that chose not to retaliate, even as new duties were imposed on China in response to its own countermeasures. While acknowledging that tariffs had made “people a little nervous” and that “some are jumping a bit out of line,” Trump reiterated his belief that trade deals with many countries, including China, would eventually be secured.

Minneapolis Federal Reserve President Neel Kashkari expressed concern that ongoing tariffs could unanchor long-term inflation expectations, even while delivering a blow to the U.S. economy. In an essay published by the regional Fed bank, Kashkari emphasized that the central bank remains open to both raising or cutting interest rates depending on how the situation evolves. He noted that the growing number of headwinds complicates the policy outlook significantly.

"Given the critical importance of keeping long-term inflation expectations anchored—and the likely short-term inflationary boost from tariffs—the threshold to cut rates, even in the face of weakening economic activity and rising unemployment, is now higher," Kashkari wrote.

San Francisco Fed President Mary Daly echoed these concerns, pointing to escalating inflationary pressures driven by widespread tariffs. She underlined the importance of maintaining a long-term outlook rather than reacting impulsively like equity markets often do. Daly also highlighted deep uncertainty among businesses regarding how and when higher tariffs would be passed on to consumers—an ambiguity that could ultimately drive some suppliers into bankruptcy. For now, she suggested, it remains unclear how the Fed should respond to such a negative supply shock.

Meanwhile, the minutes from the Fed’s March 18–19 meeting showed that policymakers were almost unanimously concerned about the dual threat of rising inflation and slowing growth. Several members acknowledged that the central bank may face “difficult trade-offs” in the months ahead. These discussions took place before the latest wave of tariffs was implemented, which has only added more uncertainty to the economic outlook.

As a result, participants leaned toward a cautious policy stance—prepared to hold interest rates higher for longer if inflation proves sticky, but also open to cutting rates if signs of economic weakness become more pressing.

In Europe, economists have revised down their forecasts for Swiss economic growth. Expectations are rising that the Swiss National Bank (SNB) will move forward with another 25 basis-point rate cut. According to LSEG data, market pricing now leans heavily toward additional easing in the coming months. Key Resistance Zone Could Trigger a New Leg Lower in USDCHF_1

Key Resistance Zone Could Trigger a New Leg Lower in USDCHF_1

Technical Analysis

USDCHF reached a local low of 0.8360 on April 9 amid heightened geopolitical volatility. Since then, the pair has bounced sharply, climbing toward 0.8583—a zone that coincides with the descending trendline. This area may act as a key resistance level, especially since the Relative Strength Index (RSI) has surged to 70, signaling overbought conditions and potentially drawing sellers back into the market.

If the trendline holds as resistance, a renewed bearish move could follow, with the 0.8476 level standing out as the next significant support zone.

Meanwhile, the 100-period and 200-period moving averages on the 1-hour chart are located at 0.8529 and 0.8660, respectively. The recent close above the 100-period moving average suggests some bullish momentum. A breakout above the trendline could open the door for a further rally toward the 200-period moving average, but until then, the bearish trend remains intact.

Trading Recommendations

Trading direction: Sell

Entry price: 0.8575

Target price: 0.8480

Stop loss: 0.8625

Validity: Apr 17, 2025 15:00:00

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Key Resistance Zone Could Trigger a New Leg Lower in USDCHF

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