The Greenback is testing a make or break zone against the Swiss franc!
Could a confluence of rising channel support, the S1 Pivot Point, and the 61.8% Fibonacci retracement near the .8000 psychological handle be enough to put the bulls back in business?
Let’s take a closer look at the 4-hour time frame:
USD/CHF: 4-hour
USD/CHF 4-hour Forex Chart Faster with TradingView
USD direction may take cues from Fed Chair Warsh’s Jackson Hole keynote on Friday and Tuesday’s July core PCE report. A hot surprise is still possible after core PPI rose at four times June’s pace. The Strait of Hormuz also remains effectively closed, with Brent crude near $94 and keeping energy inflation concerns and the case for a September rate hike alive.
The franc, meanwhile, may not put up much of a fight on its own. The SNB appears comfortable with CHF weakness, while demand for the franc as a carry trade funding currency continues to grow.
USD/CHF has pulled back sharply from the .8200 area, slicing through the Pivot Point at .8031 and putting pressure on the .8000 psychological level, where price is now consolidating.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The retreat has brought the pair into a tighter confluence zone, with the bottom of a rising channel, the S1 Pivot Point (.7928), and the 61.8% Fibonacci retracement all sitting nearby.
Still, the recent rollover from the .8100 area and the bearish SMA crossover near that zone suggest the bulls need to step up soon if they want to defend the channel.
Watch for a bounce and a 4-hour close back above the .8050 area as a sign that buyers are defending channel support. That could put the .8100 area of interest back on the radar, while a stronger move could target the R2 Pivot Point at .8177 and the previous highs near .8200.
On the flip side, if sellers push price through the channel floor and below the .7950 area, USD/CHF could slide toward the S1 Pivot Point at .7928 and the .7900 psychological support.
A sustained break below those levels could open the door to a broader shift in the medium-term bias.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
This USD/CHF setup is built around multiple technical factors converging at the same zone, a concept known as confluence. Premium members can read our lesson:
📖 Confluence: Stacking the Odds in Your Favor
Reading this helps you understand how confluence stacking works, why multiple technical factors pointing at the same level create a stronger setup than any single signal, and how to score a price action setup before you take it.
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