Upward Momentum Set to Resume from Technical Retracement

Manuel

Central Bank

Economic

Summary:

The successful defense of this cluster suggests that the primary bullish impulse remains the dominant force.

BUY USDCHF

EXP

TRADING

0.78200

Entry Price

0.79000

0.77250

0.78597 -0.00007 -0.01%

0.0

Pips

Flat

0.77250

Exit Price

0.78200

Entry Price

0.79000

The Swiss inflationary landscape remains notably subdued, with headline figures stagnating at approximately 0.1% year-over-year. Within this context, a marginal increase in inflationary pressure would not necessarily be viewed as a negative development for the domestic economy. Historically, Swiss households exhibit lower sensitivity to energy price shocks compared to their European counterparts. This resilience stems from the relatively low weight of energy within the Swiss CPI basket—estimated at 5%, versus roughly 9% in the Eurozone—and the nation’s heavy reliance on hydroelectric power, although fossil fuel imports remain a critical component for the industrial sector.

Currently, the primary concern for the Swiss National Bank (SNB) is the persistent upward pressure on the Swiss Franc (CHF), driven by a global flight to safety. This safe-haven demand significantly increases the probability of central bank intervention in the foreign exchange markets. With the policy rate currently situated at 0.00%, the SNB’s most direct tools for mitigating deflationary risks arising from CHF appreciation are either the reintroduction of negative interest rates or direct currency intervention. SNB Chairman Martin Schlegel recently indicated that the threshold for returning to negative rates is high; however, the bank’s latest communique clarified an increasing readiness to intervene in the FX market should international conditions necessitate such action.

Geopolitical tensions surrounding the ongoing conflict between the United States and Iran remain the primary focus for global participants. As the war enters its twelfth day with no discernible signs of de-escalation, market sentiment remains fraught with uncertainty. The military landscape continues to intensify, with the U.S. and Israel conducting strategic strikes against Iranian installations, while Tehran retaliates via missile and drone incursions targeting American and Israeli assets across the broader region.

On the economic front, the latest Consumer Price Index (CPI) data for February aligned perfectly with expectations, mirroring the January print at 2.4% year-over-year. Simultaneously, core figures—which exclude the volatile components of food and energy—advanced by 2.5%, precisely meeting consensus estimates. On a month-over-month basis, core inflation edged higher by 0.2%, representing a slight deceleration from the 0.3% increase recorded in January, while the annual rate held steadfast at 2.5%.

These data points have reinforced the market’s view that the Federal Reserve will maintain a highly cautious policy trajectory, as inflation continues to trend stubbornly above the central bank's 2% target. Investors are now pivoting their focus toward the upcoming Personal Consumption Expenditures (PCE) report scheduled for Friday, a release that is expected to critically shape monetary policy expectations for the coming months.

The recent Non-Farm Payrolls (NFP) report further complicated the macro narrative, revealing a startling contraction of 92,000 positions. This result starkly contradicted consensus forecasts that had anticipated a gain of 59,000 jobs. Consequently, the unemployment rate trended higher to 4.4%, though it remains marginally below the 4.5% threshold projected by the Fed for 2026. Despite this visible cooling in the labor force, consumer resilience remains remarkably robust; the Census Bureau reported that Retail Sales hit $733.5 billion in January, defying the projected 0.3% decline with a significant 3.2% year-over-year expansion. Upward Momentum Set to Resume from Technical Retracement_1

Upward Momentum Set to Resume from Technical Retracement_1

Technical Analysis

From a technical perspective, USD/CHF remains entrenched in a well-defined ascending channel. The price action recently exhibited a sharp bullish rejection after executing a corrective move to the 0.7757 handle. This specific zone is highly significant as it represents a confluence of the 0.50 and 0.618 Fibonacci retracement levels.

The structural integrity of this demand zone was further reinforced by the 100 and 200-period Moving Averages (MAs), currently situated at 0.7761 and 0.7739, respectively. The successful defense of this cluster suggests that the primary bullish impulse remains the dominant force. We anticipate a continuation of this move, with the primary technical objective targeted at the 0.7900 region, where the price would encounter the upper boundary of the current channel.

Our analysis of momentum oscillators provides further technical validation for this upside bias. The RSI is currently hovering near the 59 level, indicating that the pair maintains a healthy "runway" before reaching overbought extremes. Simultaneously, the MACD has just confirmed a bullish histogram crossover.

As the histogram bars gain structural depth and the signal lines ascend into the positive territory, the probability of a sustained extension toward the channel ceiling increases. Traders should monitor the signal lines as they cross the neutral baseline for definitive confirmation of the resurgent trend.

Trading Recommendations

Trading direction: Buy

Entry price: 0.7818

Target price: 0.7900

Stop loss: 0.7725

Validity: Mar 20, 2026 15:00:00

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Upward Momentum Set to Resume from Technical Retracement

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