USDCHF is making a big move today as US dollar is the best performing major currency, while Swiss franc is the top underperformer. The pair is up 1.4% on the day and climbs to the highest level since November 14, 2023. The move higher is driven primarily by today's rate decision of Swiss National Bank. SNB unexpectedly cut rates by 25 basis points from 1.75 to 1.50%, while market expected them to be left unchanged. This has triggered a slump on CHF market. Moreover, reversal of yesterday's dovish post-FOMC moves can be spotted today on USD and precious metals markets, with US dollar gaining ground.
Taking a look at USDCHF chart at D1 interval, we can see that while the pair is trading around 7.5% above late-December 2023 lows, this is not the largest upward correction in the ongoing downtrend. The upper limit of the Overbalance structure can be found in the 0.9030 area. Note that 38.2% retracement of the downward move launched in November 2022 can be found in the same area, as do previous price reactions. This mix of technical hurdles makes 0.9030 area a key near-term resistance zone to watch.
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Source: xStation5
Moving to a lower timeframe also shows that 0.9030 area is important. Taking a look at USDCHF at H1 interval, we can see that the pair has been trading in a 0.8750-0.8890 range recently. It seems that today's SNB decision provided fuel for a breakout above the upper limit of the range. A textbook target of this breakout can be found in the 0.9030 area. Should we see a break above this zone, buyers' attention may shift towards the next resistance zone from D1 interval - the 50% retracement in the 0.9240 area.
Source: xStation5
