At the beginning of the European market on Wednesday (February 12th), the USD/CHF showed a sideways consolidation trend around 0.9120. The market is closely monitoring Trump's possible trade tariff related information, as well as the upcoming release of US Consumer Price Index (CPI) inflation data. In addition, Fed officials Raphael Bostic and Christopher Waller will also deliver speeches, which are widely expected to provide more clues about the direction of Fed policy.

The direction of Federal Reserve policy

On Tuesday of this week, Federal Reserve Chairman Jerome Powell reiterated in testimony before the Senate Banking, Housing, and Urban Affairs Committee that the Fed is not in a hurry to further adjust monetary policy at the moment. He mentioned that the current policy stance is sufficient to address the risks and uncertainties facing the economy. It can be inferred from its speech that the Federal Reserve is trying to strike a balance between maintaining economic growth and curbing inflation.

This viewpoint has also been echoed by some market analysts. Neil Shearing, Chief Economist of Capital Economics, stated that the current market uncertainty is likely to lead Federal Reserve officials to maintain a wait-and-see attitude in the coming months. If the United States ultimately implements high tariffs, it may drive up inflation and limit the space for the Federal Reserve to continue easing monetary policy for the remainder of 2025. This analysis implies a logic: high tariffs ->rising costs ->rising inflation ->the Federal Reserve finds it difficult to continue cutting interest rates. For the US dollar, if inflationary pressures persist, the Federal Reserve's monetary policy, which tends to tighten or maintain stability, will further support the US dollar.

Outlook for US Inflation Data

The January Consumer Price Index (CPI) for the United States will be released on Wednesday. According to market expectations, the CPI annual rate is expected to remain at 2.9% from the previous value of 2.9%, while the core CPI annual rate is expected to slightly decrease from the previous 3.2% to 3.1%. If the actual data is higher than or equal to expectations, it means that inflationary pressure still exists, which will significantly support the performance of the US dollar and bring depreciation pressure to other currencies. For currency pairs related to safe haven attributes such as the US dollar/Swiss franc, it may trigger complex interactive effects: if the strong US dollar drives the US dollar/Swiss franc higher, but the Swiss franc itself also has a safe haven function, it may be favored by funds in the context of rising geopolitical risks, thereby offsetting some of the appreciation momentum of the US dollar.

Trade tariff risk

US President Trump recently stated that he may expand the scope and intensity of trade tariffs, which has once again caused waves in the global trade field. The market is generally cautious about the escalation of trade frictions, especially the potential impact of tariffs on industrial metals, semi-finished products, and finished goods, which will indirectly affect manufacturing, supply chains, and end consumption. Once trade uncertainty increases, risk aversion often heats up, and the Swiss franc, as one of the traditional safe haven currencies, usually gains capital preference, thereby exerting downward pressure on the trend of the US dollar/Swiss franc.

Overall, the US dollar/Swiss franc is currently facing a dual impact: on the one hand, the Federal Reserve's relatively stable or slightly hawkish policy stance, as well as the risk of high inflation data such as the US CPI, provide potential support for the US dollar; On the other hand, if geopolitical risks escalate further or if US foreign trade tariffs are implemented, it may stimulate market risk aversion and drive funds towards the traditional safe haven currency, the Swiss franc. Due to the interaction between the two, the US dollar/Swiss franc may maintain a relatively volatile pattern in the short term, and any unexpected macro data or major political events will disrupt the current balance.

Technical analyst interpretation:

From a technical perspective, the US dollar/Swiss franc closed sideways around 0.9120 on Wednesday, showing a certain degree of wait-and-see sentiment. The market is waiting for more conclusive information from the US CPI data and the Trump administration regarding tariffs to decide on the next steps.

Short term moving averages and trends

On the daily chart, the short-term moving averages (9-day and 14 day moving averages) show a slight upward tilt, reflecting the moderate rebound momentum of the US dollar/Swiss franc in the past few days. However, the long-term moving average (200 day moving average) is still slightly flat, indicating that the overall market is still in a volatile range and has not yet formed a significant bullish or bearish trend. Therefore, the US dollar/Swiss franc may maintain a trend of consolidation in the short term, and if there is a unilateral trend under the stimulation of major news, it may quickly test the high or low areas before.

Key support and resistance levels

If the current exchange rate can break through upwards, attention can be paid to the resistance band between 0.9170 and 0.9200, which is also the position where the rebound was hindered in the early stage. Once the price breaks through and stabilizes above this range, it is expected to further open up upward space in the future.

If the exchange rate is under pressure to decline after the release of US CPI data or trade news, attention should be paid to the support strength in the 0.9100 to 0.9080 region. Once this important support is lost, the exchange rate may accelerate its downward trend, and the next potential target may point to 0.9050 or even lower. In addition, if the technical indicators Relative Strength Index (RSI) and MACD synchronize downwards, it may further confirm the downward trend.

Vibration index and kinetic energy judgment

From the perspective of volatility indicators, the RSI value (on the 14th) moved up and down around 50, indicating a relative balance of power between long and short positions. This means that the exchange rate lacks significant unilateral momentum. And if MACD is near the zero axis, it also implies that the market is in a wait-and-see and consolidation phase. In this context, any news related to expectations of interest rate hikes, unexpected inflation data, geopolitical escalation, etc. may disrupt the balance and cause the exchange rate to rapidly develop in a unilateral direction.

epilogue

Looking at the market fundamentals and technical aspects, the US dollar/Swiss franc showed consolidation around 0.9120, indicating that the market is waiting for key information such as inflation data and trade policies. Fundamentally, if the US CPI data performs strongly, the US dollar may receive support; However, at the same time, potential high tariffs by the United States may also drive safe haven sentiment, thereby making the Swiss franc sought after. Technically speaking, the US dollar/Swiss franc is currently in a short-term oscillation phase, with clear short-term support and resistance. After breaking through the critical range, directional choices may emerge.