Yesterday at this time, the technical bias tilt was to the downside (see post HERE) with the price below the 100-hour moving average. However, the price rebounded in the session and was able to extend back above that moving average by the close.
Today, the USDCHF pair initially pushed higher and the early U.S. session, the price broke above the 200-hour moving average at 0.8001. That move came in tandem with the EURUSD’s drop following the initial reaction to the ECB policy announcement.
However, the rally was short-lived. A sharp spike in U.S. initial jobless claims to 263K vs. 235K expected quickly flipped the script. Sellers stepped in, driving the pair back down toward the falling 100-hour moving average at 0.7967. This time, on the first test, support buyers leaned against the level, giving the pair leading to a modest bounce.
At the moment, the pair is trading near 0.7973. The short-term bias has tilted slightly to the downside after the failed break above the 200-hour MA and the subsequent fall back below the 38.2% retracement of the move lower from last week’s high. That level comes in at 0.7975.
That said, the 100-hour MA at 0.7967 remains the key risk-defining level. If price holds above it, buyers may continue to defend and look for a rebound toward the topside. A sustained move below, however, would open the door for a deeper correction lower.
Overall, the buyers had their shot. They failed. The sellers are taking their shot. Will they be able to push below the 100-hour moving average, or is the battle between 100 and 200-hour moving averages what traders are focused on?
Fundamentally, earlier this week SNBs Schlegel commented on policy going forward saying:
- Negative interest rates would only return under exceptional circumstances, stressing their harmful effects on savers and pension funds. With the policy rate now at zero following this year’s cuts, Schlegel said officials remain cautious about further easing, even as they monitor U.S. tariffs and sluggish domestic inflation. He defended the pace of earlier reductions as necessary to avoid bigger risks, but conceded it leaves the SNB with limited scope to respond to new shocks. Markets, he noted, still expect rates to remain steady well into 2026.
That should be supportive for the CHF, but it takes two to tango in a currency pair and technicals do matter too. The Fed is expected to cut rates in September, starting their easing cycle.
