USD/CHF Price Forecast: Can Support at Previous Highs Around 0.8315 Hold as Bears Test It?

• Support at 0.8310-0.8315 comes under test as USD/CHF retreats from four-week highs of 0,8337.
• US Dollar declines are likely to be contained by market expectations of a December Fed rate hike.
• Technical indicators point to a modest pullback from overbought territory.
  

Moderate selling pressure weighs on the US Dollar (USD) against the Swiss Franc (CHF) on Thursday, paring some of the 1.7% advance recorded over the previous two days. That rally had taken momentum indicators on intraday charts into overbought territory. Having retreated from one-month highs around 0.8340, USD/CHF is trading at 0.8320 and testing support at earlier highs in the 0.8310 to 0.8315 range.

The scope for further Dollar weakness is nevertheless expected to be limited. Tuesday’s hot US consumer inflation figures, alongside last week’s strong employment report, have cleared the path for another interest rate increase by the Federal Reserve (Fed) in December.

That outlook has received backing from Fed officials, some of whom might reaffirm their position later on Thursday. Earlier this week, Chicago Fed President Austan Goolsbee and San Francisco Fed President Mary Daly voiced concerns over elevated inflation pressures. New York Fed President John Williams has already signalled the possibility of another rate hike before year-end and is also expected to speak later in the day. Against this backdrop, a substantial reversal in the US Dollar remains difficult to envisage.

Technical Analysis: Can Buyers Contain the Pullback From Overbought Levels?

After buyers met resistance at the 78.6% Fibonacci retracement of the October-November rally, the pair has begun correcting lower from oversold levels, although declines are likely to attract buying interest. At the current USD/CHF level of 0.8322, the 4-hour Relative Strength Index (14) stands near 67, remaining close to overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) remains positive, indicating that buying pressure persists despite signs of slowing upward momentum.

Sellers have struggled to break through the previously noted support zone above 0.8310. A move below this area would bring the November 10 high near 0.8270 into focus as the next significant target, though that level appears distant for today. Conversely, a confirmed break above the Fibonacci retracement at 0.8337 would open the way towards key resistance at the October 14 high of 0.8395.

(An AI tool assisted in preparing this story’s technical analysis. Learn more.)