Swiss Franc weakens following an unexpected 0.50% rate cut by the Swiss National Bank (SNB)

USD/CHF surged to a two-week high with a 0.8% jump on Thursday morning, following an unexpected 50 basis points rate cut by the Swiss National Bank (SNB), reducing the rate from 1% to 0.50%. The move surprised markets, which had anticipated a smaller 25 basis points cut.

This marked the fourth policy easing in 2024, following three 0.25% reductions in March, June, and September, and represents the SNB’s most significant rate cut in nearly a decade. The central bank stated its commitment to maintaining price stability and keeping inflation within its 0%-2% target range, with November inflation recorded at 0.7%.

The post-SNB rally extended the recovery from the December 6 higher low at 0.8725 into its fifth consecutive day. The move broke above the 61.8% Fibonacci retracement of the 0.8957/0.8725 decline, also testing resistance at the lower platform near the 0.8890 zone.

A sustained break above these levels would confirm a fresh bullish signal, paving the way for a full retracement of the 0.8957/0.8725 bear leg.

Technical indicators on the daily chart remain mixed. While the 14-day momentum continues to dip in negative territory, moving averages are in a bullish configuration, supported by the recent formation of a 10/200 DMA golden cross.

Near-term bullish momentum is likely to persist as long as the price remains above the broken 50% Fibonacci level at 0.8841, further reinforced by the 20-DMA, which has turned into support.

However, caution is warranted if the price falls below the 200-DMA pivot at 0.8824, which could signal a recovery stall and shift the near-term outlook to the downside.

Res: 0.8869; 0.8893; 0.8902; 0.8917
Sup: 0.8841; 0.8824; 0.8814; 0.8780