The Swiss Franc (CHF) retreated on Wednesday following an initial surge driven by positive Swiss economic sentiment data. While the ZEW Survey – Expectations for March showed continued investor optimism in response to the Swiss National Bank’s (SNB) recent interest rate reduction, a broader shift in sentiment and a rising US Dollar (USD) ultimately weighed on the Franc.
Technical Analysis: USD/CHF Pulls Back After Breakout
The USD/CHF pair, which briefly peaked at 0.9063, appears to be experiencing a pullback within its recent short-term uptrend. This trend started after USD/CHF broke out of its February/early-March trading range. The pair recently hit its expected breakout target near 0.9050.
The Moving Average Convergence/Divergence (MACD) indicator signals underlying weakness, showing bearish divergence with the price action compared to the March 22 peak. Additionally, the overbought Relative Strength Index (RSI) suggests caution against adding bullish positions.
A deeper pullback may target support at the March 22 highs and 0.9020. However, the short-term uptrend remains intact, with 0.9100 as a potential upside target. A significant drop below 0.8960 would signal a possible trend reversal. Further decline below 0.8890 would confirm a break back into the previous range, suggesting a deeper slide with an initial target near the range lows of 0.8715.
