USD/CHF Price Forecast: Holds 61.8% Fibo retracement at around 0.7775

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The USD/CHF pair trades 0.25% higher at around 0.7800 during the European trading session on Tuesday.

USD/CHF rises to near 0.7800 as the US Dollar gains ahead of Warsh’s confirmation hearing.
No official confirmation from Iran yet that it is sending a team to resume peace talks with Iran.
The US Retail Sales data is estimated to have grown strongly by 1.4% MoM in March.

The USD/CHF pair trades 0.25% higher at around 0.7800 during the European trading session on Tuesday. The Swiss Franc pair gains as the US Dollar (USD) rises ahead of the confirmation hearing of United States (US) President Donald Trump’s nominee, Kevin Warsh, as the Federal Reserve’s (Fed) next chairman at 14:00 GMT.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.25% higher to near 98.30.

Investors await Kevin Warsh’s testimony to get cues regarding the Fed’s monetary policy outlook.

Before Warsh’s testimony, investors will also focus on the US Retail Sales data for March, which will be published at 12:30 GMT. The Retail Sales data, a key measure of consumer spending, is estimated to have grown at a faster pace of 1.4% Month-on-Month (MoM) against 0.6% increase seen in February.

On the geopolitical front, a report from the Wall Street Journal (WSJ) shows that Iran has agreed to have another round of peace talks with the US; however, there has been no official confirmation.

USD/CHF technical analysis

USD/CHF trades higher at around 0.7800 at the press time. However, the near-term tone remains bearish as it holds beneath the 20-day exponential moving average (EMA) at 0.7866 and below the mid-range 50.0% Fibonacci retracement at 0.7826.

The Relative Strength Index (14) hovers near 41, reflecting weak momentum that reinforces the downside bias while stopping short of oversold conditions.

On the downside, immediate support is aligned at the 61.8% Fibonacci retracement at 0.7775, with deeper demand seen at the 78.6% level at 0.7701 and then the recent Fibonacci cycle low around 0.7608. On the topside, a recovery would first need to clear the 50.0% retracement at 0.7826, before challenging the 20-day EMA at 0.7866 and the 38.2% retracement at 0.7878; above there, the 23.6% level at 0.7941 and the cycle high near 0.8044 act as successive resistance hurdles.

(The technical analysis of this story was written with the help of an AI tool.)

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.