USD/CHF Prepares to Break Key Upward Channel

USD/CHF has dropped more than 1.7% over the past two trading sessions as the U.S. dollar continues to weaken. So far, selling pressure on the U.S. currency remains strong, following disappointing retail sales data, which showed a -0.9% decline compared to the expected -0.2%. This has fueled concerns about a potential economic slowdown in the U.S.

Meanwhile, the Swiss franc, known as a safe-haven asset, has benefited from mixed economic data and the reciprocal tariffs policy announced by the Trump administration. This has kept demand for the franc stable and reinforced a strong bearish bias on USD/CHF.

Breakout of the Upward Channel

Since September 2024, the pair had maintained a solid upward channel, reaching a high of 0.92013. However, selling pressure has intensified, pushing price action below the lower boundary of the channel, which aligns with the 50-period simple moving average (SMA).

If pressure continues to build, the uptrend that has held for months could fade, giving way to a stronger downtrend—especially if price breaks the support zone where it is currently struggling.

MACD Indicator

The MACD line and the signal line both show a strong downward slope, approaching the neutral 0 level. The MACD histogram has also been consolidating near this level, indicating that the moving average trend is turning neutral.

As long as the histogram remains close to zero, it will be difficult for a new trend to emerge in the short term.


TRIX Indicator

The TRIX indicator supports the bearish scenario, as it has started declining sharply and is now approaching the 0 neutral line.

If the TRIX crosses below zero, it would confirm bearish dominance, reinforcing the selling momentum in USD/CHF.

Key Levels to Watch:

• 0.91746 – Resistance:
  
  A critical level for bullish movements, marking a potential recovery zone for the previous upward channel.
  
  If price rebounds to this level, it could invalidate the bearish trend and restore short-term buying momentum.
  
  
• 0.89978 – Key Support:
  
  The current support level aligns with recent lows from previous sessions, the Ichimoku Cloud barrier zone, and the 23.6% Fibonacci retracement level, highlighting its significance as a key barrier for sellers.
  
  A break below this level would accelerate bearish momentum, confirming the end of the previous uptrend.
  
  
• 0.88930 – Major Support:
  
  A long-term support level, corresponding to neutral price zones from November 2024 and the 38.2% Fibonacci retracement level. If the bearish move extends to this point, it could signal the formation of a more significant downtrend in USD/CHF on the daily chart.
  

By Julian Pineda, CFA – Market Analyst