USD/CHF Analysis: SNB Decision Breaks Multi-month Trend


According to Reuters, on the sidelines of the World Economic Forum in Davos in January, the head of the Swiss National Bank (SNB) Thomas Jordan told the Swiss press that the appreciation of the franc creates problems for exporters. Thus, indicating intentions to weaken the CHF.

His words in January seem to be in line with how events are developing — the franc has weakened against the US dollar by more than 6% since the start of the year.

Moreover, today, quite unexpectedly, the Swiss National Bank decided to lower the interest rate: actual = 1.50%, forecast = 1.75%, previous value = 1.75%.

The result of the decision today was a sharp weakening of the franc against other currencies, including the US dollar.

Technical analysis of the USD/CHF chart today shows that the bulls are breaking the downward trend (shown by the red channel), which dates back to the fall of 2022. Wherein:
→ the price of USD/CHF may continue to develop within the channel shown by the blue lines, including a rollback from the 4-month high;
→ in case of a rollback, the level of 0.8888 may constitute support (as a former resistance) - just like the lower blue line.

If the weakening of the franc, which is facilitated by the SNB, continues, the price of USD/CHF may reach the level of 0.9095 - near which the market has repeatedly formed reversals.

But most importantly, the easing of monetary policy by the SNB will likely serve as an example for the National Banks of other Western countries - which, in turn, will cause the emergence of new trends in the foreign exchange markets.

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