Technical Setup Favors Sharp Rally to 0.7995 Resistance

Summary:

It is highly likely that the price may spike down to these levels once more to trigger liquidity before finding sustained bullish momentum.

Buy USDCHF

EXP

PENDING

0.79050

ENTRY

0.79950

TGT

0.78600

-- -- --

Point

PENDING

0.78600

CLOSING

0.79050

ENTRY

0.79950

TGT

Attention in Switzerland is now focused on the Swiss National Bank (SNB) interest rate decision scheduled for announcement on Thursday. Markets are widely anticipating that the SNB will maintain its policy rate unchanged at 0.00%.

Inflation in Switzerland has eased toward the lower bound of the SNB's 0–2% target range. Despite this, policymakers have repeatedly indicated that the threshold for reverting to negative interest rates remains very high. The central bank also expects inflation to pick up slightly in the coming quarters, reinforcing expectations for a stable policy stance in the near term.

The Federal Reserve (Fed) cut interest rates by 25 basis points (bps) on Wednesday amid a period of elevated prices, as inflation approaches the 3% mark. Crucially, the central bank heavily implied a pause in its easing cycle, with Chair Jerome Powell reiterating that they are now in a "wait-and-see" mode and that rates currently sit in the upper range of neutrality estimates.

Powell acknowledged the inherent tension between the central bank's dual mandate. He stressed that the Fed is "well positioned" to "wait and see" how the economy evolves, having already eased policy by 75 bps this year. Powell concluded that after 175 bps of cuts, "we've moved our policy back to a level that is certainly not strongly restrictive right now," adding, "I think it is in a neutral range."

Following the rate cut announcement, markets are currently pricing in almost a 78% probability that the Fed will keep interest rates stable next month, up from 70% just before the rate cut announcement, according to the CME FedWatch tool.

Recent U.S. labor data presented a mixed picture. Initial jobless claims for the week ending December 6th rose to 236K, a considerable increase from the upwardly revised 192K the previous week, according to the Department of Labor. In contrast, continuing claims for the week ending November 29th fell to 1.838 million from 1.937 million, suggesting some stabilization in long-term unemployment. Separately, the U.S. goods and services trade balance narrowed to $-\$52.8$ billion in September, an improvement from $-\$59.3$ billion in August and better than expected. Technical Setup Favors Sharp Rally to 0.7995 Resistance_1

Technical Setup Favors Sharp Rally to 0.7995 Resistance_1

Technical Analysis

The USD/CHF pair has recently experienced a sharp bearish impulse, reaching a local minimum of 0.7924. However, just below this point lies a significant historical support zone defined by strong candle shadows. This zone, ranging from 0.7873 to 0.7893, is where the price staged major bullish rebounds in both mid-October and mid-November. It is highly likely that the price may spike down to these levels once more to trigger liquidity before finding sustained bullish momentum.

The Relative Strength Index (RSI) on the 4-hour chart has dropped dramatically to the 20 level, entering clear and extreme oversold territory. This condition suggests that bulls could re-enter the market at any moment. Furthermore, the 100-period and 200-period Moving Averages (MAs) are situated at 0.8041 and 0.8026, respectively, while a critical local resistance level resides around 0.7995. This resistance level is anticipated to attract any potential upward correction.

Trading Recommendations

Trading direction: Buy

Entry price: 0.7905

Target price: 0.7995

Stop loss: 0.7860

Validity: Dec 23, 2025 15:00:00

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