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  • The strengthening of the Dollar allows an increase in the price of the USD/CHF.
  • Investors take refuge in the Swiss Franc, given the uncertainty generated by the spread of the delta variant of Covid-19.
  • A downtrend is forecast for the USD/CHF pair for the coming week.
  • It is expected for the USD/CHF pair to test the support level of 0.8920.

The USD/CHF weekly forecast is mildly bearish as certain resistance levels still hold. The strength in CHF amid risk-off sentiment also caps the gains. The strengthening of the US dollar is responsible for the upward movement of the USD/CHF pair. The strengthening is mainly due to the expectations generated among investors about a change in the Fed’s monetary policy at the end of the year or in early 2022. These expectations were fueled by the comments of Fed Vice President Richard Clarida, who said on Wednesday that the central bank could begin to reduce the purchase of assets later this year.

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In previous weeks, Fed Chairman Jerome Powell said that “substantial progress” must be seen to change monetary policy. However, he clarified later that this “substantial progress” was linked to better inflation and job creation results. In that sense, this week’s unemployment data in the United States were also published, which turned out to be better than expected. This way, the expectations of a change in monetary policy increased. The data released goes as follows:

In July, 943,000 new jobs were created, exceeding the expected figure by a margin of 73,000 new jobs. This is the highest number of jobs created since September 2020. Also, the number of Americans who filed for unemployment benefits up to 385,000 compared to 399,000 the previous week.

For its part, the Swiss franc also appreciated the current risk aversion of large investors because of the fear generated by the delta variant. Remember that the Swiss franc is considered a safe-haven currency.

Upcoming events

There will be no relevant events or announcements on the Swiss side. Inflation is a topic that all economic actors are watching out for right now. For next week the consumer price and product price indices will be published. The US CPI is expected to decline to 0.5% against June’s 0.9% figure. The Fed policy directly depends on it. The good results of these indexes will further strengthen the US dollar. It is important to remember that the CPI is one of the aspects that the Fed authorities are monitoring to decide on a future change in their monetary policy.

USD / CHF weekly technical analysis: 55-weeks EMA pressing down

After hitting the low of 0.9051, the USD/CHF pair rises during the Asian session to maintain a positive outlook/ The pair’s price closed the week at 0.91445. However, failing to stay above the 55-week EMA indicates a medium-term downtrend.

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USD/CHF weekly forecast chart
USD/CHF weekly forecast chart

USD/CHF forecast next week

It is expected a downtrend for next week. The breakout of the 0.9017 level confirms the decline from the 0.9273 level to retest the 0.8920 support.

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