USDCHF Hits 4-Month High After SNB Rate Cut Dampens Swiss Franc

The USDCHF surged by 1% during the early European session on Thursday, spurred by the Swiss National Bank’s unexpected decision to slash interest rates by 25 basis points. Market expectations had leaned towards the central bank maintaining rates during today’s policy meeting.

In response to the SNB’s move, the Swiss franc experienced widespread selling, amplifying existing short positions on the currency.

Following the announcement, the USDCHF reached a four-month high and exerted pressure on the key psychological barrier at 0.90. This level serves as a significant pivot point at 0.9028/52, representing the Fibonacci 76.4% retracement level of the range from 0.9244 to 0.8332 (the high on November 13). The fresh rally breached the upper boundary of a four-week consolidation range, with a close above signaling a continuation of bullish momentum and paving the way for an extension of the upward movement from 0.8332 (the low on December 28).

The daily chart reflects strong positive momentum, supported by the formation of a golden cross between the 10-day and 200-day moving averages, further bolstering the near-term bullish outlook.

The previously breached Fibonacci 61.8% level at 0.8895 has now turned into a robust support level, safeguarding against downside risks and anchoring at the lower pivot of 0.8820, which corresponds to the 200-day moving average.

Res: 0.8974; 0.9000; 0.9028; 0.9052

Sup: 0.8895; 0.8866; 0.8820; 0.8782