USDCHF: Fed chief's statements support the growth of the currency pair

The USDCHF exchange rate is strengthening and preparing to test the resistance level at 0.8525. Read more in our USDCHF analysis and forecast for October 1, 2024.

USDCHF forecast: key trading points

• Fed chairman Jerome Powell's statements about less drastic rate cuts support USDCHF
• The probability of a 50 basis points rate cut in November fell to 38.2%, while the probability of a 25 basis points cut increased to 61.8%
• KOF's Swiss economic outlook indicator rose to 105.5, the highest since September 2021
• USDCHF forecast for 1 October 2024: 0.8373 and 0.8333

Fundamental analysis

USDCHF is on the rise after rebounding from the lower boundary of the sideways range, in which the pair has been staying since late August. USDCHF was supported by the statements of Federal Reserve Chairman Jerome Powell, who indicated that the regulator is likely to favor less drastic rate cuts at the upcoming meetings.

Powell emphasized that the recent 50 basis points rate cut does not mean that similar steps will be repeated in the future, adding that the Fed does not follow a predetermined course. This statement caused market participants to revise expectations for an aggressive 25 basis point rate cut in November, reducing the probability of such a scenario from 53% to 38.2%. At the same time, the probability of a softer 25-basis-point cut rose to 61.8%. Within the USDCHF forecast for today, this could support the pair's current rise as expectations of fewer rate cuts favor a stronger US Dollar.

Meanwhile in Switzerland, the KOF Switzerland economic outlook indicator (KOF Switzerland Economic Barometer) rose to 105.5 in September 2024 from 105 in August, exceeding analysts' forecasts who expected a reading of 101. This is the highest value since September 2021, indicating a steady recovery in the Swiss economy. Improvements are particularly notable in industry, as well as in the finance, construction and services sectors.

Today investors' attention is focused on key economic data, including the United States JOLTS Job Openings and the ISM United States Manufacturing Purchasing Managers Index (PMI).

USDCHF technical analysis

On the H4 chart of the USDCHF pair, the market continues to develop a wide consolidation range around the level of 0.8444. Today, October 1, 2024, the structure of the wave to the level of 0.8440 is executed. Further development of the growth link to the level of 0.8480 is not excluded. After working off this level, we will consider the beginning of formation of the structure of decrease to the level 0.8373 with the prospect of continuation of the trend to the level 0.8333. The target is the main one.

Summary

USDCHF continues to rise on the back of the Fed chief's statements, which support expectations of a smaller interest rate cut. At the same time, positive data on the Swiss economy and upcoming key economic reports from the U.S. may affect the rate further. Technical indicators, for today's forecast for the USDCHF pair, suggest to consider the probability of a downward wave to the levels of 0.8373 and 0.8333.