Near 0.8300: USD/CHF Price Forecast as strong bullish momentum lifts pair to highs

• 0.8286 marks a fresh two-week high for USD/CHF. The pair has gained more than 1% in under two days.
• Growing bets on further Fed tightening in December drive broad-based USD gains.
• Resistance between 0.8300 and 0.8315 is likely to challenge US Dollar bulls.

0.8286 is the latest two-week high for USD/CHF. The pair has advanced more than 1% since the US inflation release. On Wednesday, stronger expectations of a December interest rate increase by the Federal Reserve (Fed) are lifting the US Dollar (USD). Meanwhile, greater risk appetite and an adverse monetary policy divergence are weighing heavily on the Swiss Franc (CHF).

Tuesday's stronger-than-forecast US Consumer Price Index (CPI) readings reinforced expectations of additional Federal Reserve tightening in December. The Greenback is outpacing its peers on Tuesday.

Comments from Fed officials earlier on Wednesday supported those expectations. Philadelphia Fed President Anna Paulson advocated “further gradual tightening” to return inflation to target. Later, Dallas Fed President Lorie Logan stated that “it is clear that the Fed needs at least two more quarter-percentage-point  increases.”

A December rate increase is almost fully priced into futures markets, according to the CME’s FedWatch Tool. Pricing also assigns a 12% probability to a 50 basis points increase. By contrast, the Swiss National Bank (SNB) is not expected to lift its benchmark rate above the current 0% anytime soon. Against a risk-on market backdrop, that divergence weighs heavily on the Swiss currency.

Technical Analysis: 0.8300 Area May Challenge Bulls

At 0.8283, USD/CHF maintains a positive near-term bias following a rise of nearly 2% from last week's lows. Momentum remains strongly bullish on the four-hour charts. The Relative Strength Index (14) is approaching overbought levels, while green bars on the Moving Average Convergence Divergence (MACD) histogram are expanding.

Significant resistance is nevertheless likely between 0.8295 and 0.8313. The lower boundary combines the 29 October low with the 61.8% Fibonacci retracement of the October-November correction; the upper boundary marks the 28 October high. A break above this zone would put the 15 October high around 0.8350 in focus, followed by the long-term high of 0.8395 reached in mid-October.

For sellers, the session low of 0.8248 is likely to provide the first downside hurdle. Further support lies around 0.8225, the top of last week's range, before the Monday and Tuesday lows at 0.8174.

(An AI tool assisted in preparing the technical analysis in this article. Learn more.)