Retrace to Key Support Offers Buying Opportunities as Uptrend Remains Intact

Summary:

The RSI dropped to the 39 level—an aggressive move on the indicator to touch levels not seen since July 15, when price was at considerably lower levels, signaling that bearish momentum is rapidly fading.

Buy USDCHF

End Time

CLOSED

0.81500

ENTRY

0.82380

TGT

0.80500

0.80908 +0.00213 +0.26%

1000

Points

Loss

0.80500

0.80499

CLOSING

0.81500

ENTRY

0.82380

TGT

U.S. President Donald Trump said he will order heavy strikes against Iran in retaliation for its "surprise attack" on U.S. forces overnight, Bloomberg reported on Wednesday. "We are going to hit them hard," Trump said. "They are going to take a beating," he added.

Iranian media noted that Iran's Islamic Revolutionary Guard Corps (IRGC) targeted a base in Jordan in response to "aggressive U.S. actions." The United States and Saudi Arabia also struck Iran-backed militants in Iraq after Riyadh said it intercepted drones launched by Iraqi groups targeting its oil facilities.

On the monetary policy front, the Fed left the Federal Funds rate at its current target range between 3.50% and 3.75% at its monetary policy meeting on Wednesday. However, the statement showed that three committee members voted for a 25-basis-point rate hike at this meeting.

The FOMC kept rates steady, as expected, considering that economic activity continued to expand at a solid pace and the labor market remained stable. Productivity growth and capital investment were described as solid, while inflation remained elevated, partly due to supply shocks in sectors like energy.

The 9-3 vote highlighted a clear appetite for a tighter stance within the Committee: Beth Hammack (Cleveland), Neel Kashkari (Minneapolis), and Lorie Logan (Dallas) all dissented in favor of raising rates by 25 basis points.

Their message on price stability was uncompromising. After five years of elevated inflation, Warsh acknowledged that the public may have come to believe the Fed was comfortable with inflation above 2%, but rejected that idea outright: there is only one target, and the Fed intends to meet it.

The Swiss franc is expected to continue weakening, both technically and fundamentally. Bloomberg, citing sources, reported that the Swiss National Bank (SNB) is expected to keep rates near zero until late 2027.

In Switzerland, the 10-year government bond yield remains near 0.45%, holding close to its highest level in approximately two months. The recent rebound in energy prices, driven by geopolitical tensions in the Middle East, has led markets to reconsider the outlook for inflation and monetary policy. Nevertheless, the Swiss National Bank (SNB) kept its benchmark rate at 0% during its latest meeting, arguing that inflation should remain relatively stable over the medium term.

On the other hand, SNB data revealed that foreign exchange reserves rose to CHF 759 billion in June, up from CHF 711 billion recorded in May. This development suggests increased activity by the entity in currency markets to prevent an excessive appreciation of the Swiss franc.

However, the labor market showed some signs of cooling. The unemployment rate unexpectedly climbed to 3.1% in June, reaching its highest level in nearly five years. This result reinforces expectations that the SNB will maintain an accommodative monetary stance over coming months, against a backdrop characterized by moderate growth and contained price pressures. Retrace to Key Support Offers Buying Opportunities as Uptrend Remains Intact_1

Retrace to Key Support Offers Buying Opportunities as Uptrend Remains Intact_1

Technical Analysis

USDCHF made a sharp downward reaction; however, the broader picture remains bullish as no major level was broken. What did occur is that this pullback approached the local support level at 0.8120, a level that aligns neatly with an ascending trendline along which USDCHF has recently traveled, opening up the possibilities for a bullish resumption. Meanwhile, the 100 and 200-period moving averages are closely tracking this trendline, sitting at 0.8094 and 0.8083, respectively, which will provide dynamic support as price approaches this zone.

Looking at the oscillators, the RSI dropped to the 39 level—an aggressive move on the indicator to touch levels not seen since July 15, when price was at considerably lower levels, signaling that bearish momentum is rapidly fading. Meanwhile, the MACD shows a bearish histogram due to the recent movement; however, the signal lines have not crossed into negative territory, meaning that if a rejection occurs off the trendline zone, price action could continue its upward path from here.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8150

Target price: 0.8238

Stop loss: 0.8050

Validity: Aug 07, 2026 15:00:00

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