USDCHF came under heavy selling pressure last week, breaking below its 100-day moving average at 0.79753. The decline extended toward the 61.8% retracement of the move up from the May low to the July high, which sits at 0.79519. The pair touched a low of 0.7950 before buyers stepped in and pushed it back above the 100-day moving average.

The recovery gathered pace on Friday, supported in part by comments from SNB Board Member Petra Tschudin, who said the CHF had weakened amid higher inflation expectations abroad and relatively low inflation expectations in Switzerland. Comments from SNB officials carry particular weight because the franc's exchange rate feeds directly into Swiss import prices and the inflation outlook, and the central bank has a long history of engaging with the currency's level directly, most notably by enforcing a floor of 1.20 francs per euro from 2011 until January 2015. The wide policy-rate gap between the Federal Reserve and the SNB is a further standing feature of the pair's backdrop.

After an early dip during Asia-Pacific trading today, buyers returned and drove USDCHF toward its next key technical target. That area is defined by the lower end of a broader trading value area, the price band where the market spent the bulk of its time, which had contained much of the price action going back to mid-June and starts near 0.8029. The session high reached 0.8028, falling just short of that level, while the falling 100-hour moving average at 0.80296 added further resistance.

Sellers leaned against that resistance and pushed the rate back toward a swing area near 0.8009. Below that, natural support at 0.8000 also sits near the 50% midpoint of the range since the late-May low. A break below those levels would shift the focus back toward the 100-day moving average at 0.7975.

From a technical standpoint, sellers are maintaining the advantage as long as USDCHF remains below the falling 100-hour moving average and the swing area near 0.8030. A move below 0.8000 would add to the bearish bias and put the 100-day moving average at 0.7975 back in focus as the next key downside target. These moving-average and Fibonacci reference points are among the most widely tracked benchmarks in currency trading, which is why price behavior around them attracts close attention. As a dollar pair, USDCHF also reflects broad dollar moves alongside franc-specific factors, including the franc's long-standing role as a safe-haven currency, with scheduled Swiss inflation releases and the SNB's quarterly monetary policy assessments serving as the recurring fundamental checkpoints for the pair.

Source: ForexLive