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  • Consumer inflation in Switzerland fell to 3.3% in September.
  • SNB will continue making efforts to tame inflation.
  • The SNB chairman no longer views the Swiss franc as overvalued.

Today’s USD/CHF forecast is bullish after Swiss consumer price inflation fell to 3.3% in September. The annual rate in August was 3.5%, a 29-year high, and economists had anticipated it to remain stable at that level. Core inflation, which excludes volatile goods like gasoline and food costs, remained constant from August and increased by 2.0% annually.

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Although Switzerland’s relatively low price increases compared to worldwide rivals, the Swiss National Bank is prepared to make more efforts to combat inflation, SNB Chairman Thomas Jordan stated last week. The SNB raised its policy rate to 0.5% last month, bringing an almost 8-year period of negative interest rates to an end.

Thomas Jordan, the chairman of the Swiss National Bank, told a Swiss newspaper that the Swiss franc was not highly valued despite its nominal rise and added that the central bank aimed to be purposefully vague about how it views the safe-haven currency.

“In the past, we referred to the Swiss franc as highly valued or even significantly overvalued to signal the need for intervention. At the moment, the Swiss franc’s valuation is no longer clearly high, and we do not want to comment on every move,” Jordan told the Neue Zuercher Zeitung paper in an interview released on Saturday.

His remarks come as the SNB, following years of currency intervention and negative interest rates, concentrates on exploiting the franc’s strength to combat inflation.

USD/CHF key events today

Investors will pay attention to the ISM manufacturing PMI report from the US. This report will give insights into business activity and the economy.

USD/CHF technical forecast: Buyers gathering momentum for a break above 0.9850

USD/CHF forecast

The 4-hour chart shows the price trading at the 30-SMA and the RSI above 50. Bulls are in charge of the market but have paused around the 0.9850 resistance level. Bulls took over after bears could not break below the 0.9750 support level. The first time, the price reversed at 0.9850, showing strong resistance.

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If this level holds again, the price will retest support at 0.9750. However, if bulls can gather enough momentum, the price will likely break above the resistance and head for the next resistance level at 0.9950.

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