USD/CHF heading into the low end, aimed at 0.8850

• The USD/CHF is softening its stance heading into the Friday close.
• The US Dollar is seeing a mild broad-market sell-off to cap off the trading week.
• Investors are increasing their bets that the Fed is done with rate hikes.

The USD/CHF is seeing a step down back into the week’s lows near the 0.8860. The Swiss Franc (CHF) caught a soft bolstering from better-than-expected Swiss Industrial Production figures, and the Greenback (USD) is seeing bearish pressure as investors are leaning into bets that the Federal Reserve (Fed) is finally done with their rate hike cycle.

Swiss Industrial Production printed at 2% for the annualized third quarter, above the previous quarter’s -0.7%, which was revised slightly higher from -0.8%.

Inflation and growth figures for the domestic US economy appear to be moderating at a quicker pace than markets initially anticipated, once more giving rise to the broader market narrative that the Fed is done with rate hikes and investors are now turning their bets towards when rate cuts will begin.

With Fed policymakers continuing to strike overly-cautious tones in public speaking engagements, market participants are adding extra weight to economic data releases on a case-by-case basis: every signal of deceleration sends market sentiment soaring as traders cheer moving closer to interest rate cuts, and every uptick drives market fears of “higher for longer”. 

In the meantime, the Fed’s own rate expectations see benchmark interest rates going nowhere fast for the foreseeable future, and the first rate cut isn’t expected until well into 2024.

USD/CHF Technical Outlook

The USD/CHF is trading into the week’s low side near the 0.8860 level as sellers try to push the pair down into 0.8850 ahead of the Friday closing bell.

The Franc appreciated aggressively earlier in the week, taking the USD/CHF down from above the 0.9000 handle to trade into the latter week’s consolidation range.

Daily candlesticks have the USD/CHF trading on the low side of the 200-day Simple Moving Average (SMA) currently grinding down below the 0.9000 key level.

Despite the pair’s recent climb into the 0.9200 neighborhood, a long-term bullish trend couldn’t be maintained and the pair is dropping into the low side, marking in a lower higher from November’s early swing high into 0.9100.

USD/CHF Daily Chart

USD/CHF Technical Levels