On Friday (January 17th), the US dollar/Swiss franc (USD/CHF) slightly rebounded to around 0.9100, despite the support of US economic data for the US dollar, the performance of the Swiss franc among major currencies remains strong. The market is closely monitoring the upcoming inauguration ceremony of US President Trump and his potential economic policies, particularly tariff policies and tax reform. Against this backdrop, the strong performance of the Swiss franc and the volatile trend of the US dollar led to a narrow consolidation of the US dollar against the Swiss franc during the European session on Friday.

Fundamental analysis: Strong US dollar, Swiss central bank monetary policy pressure

Although the US dollar has shown some correction against the Swiss franc, the US dollar remains strong. The core consumer price index (CPI) in the United States unexpectedly fell to its lowest point in over three years in December, which has raised expectations in the market that the Federal Reserve (Fed) may adopt a more loose monetary policy. Despite this, the US dollar index (DXY) still rose to 109.15, indicating that the market is full of expectations for the economic policies that Trump may introduce soon after taking office. Investors expect the Trump administration to increase tariffs and reduce taxes, which could have a significant impact on the global trade environment and the US economy, thereby driving the US dollar to maintain its strength in the short term.

However, the performance of the Swiss franc has been relatively strong, and the market generally expects the Swiss National Bank (SNB) to continue to cut interest rates to avoid continued low inflation in Switzerland. The Swiss National Bank has lowered its key lending rate to 0.5% and is facing the risk of inflation falling below its target. The market believes that the Swiss National Bank may adopt further monetary easing policies to address this challenge. Recently, the Swiss franc has performed strongly, especially against major currencies such as the Japanese yen, with significant gains. This trend has put pressure on the US dollar against the Swiss franc, leading to a pullback.

Technical analysis: USD/CHF is under pressure and has retreated to key support levels

From a technical perspective, the US dollar against the Swiss franc is still in a state of fluctuating correction. The price has fallen to around 0.9100, which is close to an important psychological support level and is expected to become a key support in the short term. If the price breaks below this level, it may further test lower support areas such as 0.9000 and 0.8958. However, over a longer period of time, the US dollar still has some upward potential against the Swiss franc, especially in the absence of official Trump economic policies.

At present, the 20 week index smoothed moving average (EMA) of the US dollar against the Swiss franc continues to tilt upwards, indicating that the short-term trend is still biased towards an upward trend. In addition, the 14 week Relative Strength Index (RSI) is between 60.00 and 80.00, which is in a bullish range and further supports the momentum of price increases. If the USD/CHF can break through the resistance level of 0.9244, it is expected to challenge the 0.9300 level and the high point of 0.9342 on March 16, 2023.

Market outlook: USD/CHF may face greater volatility in the future

Overall, the trend of the US dollar against the Swiss franc is still influenced by multiple factors. Firstly, the strength of the Swiss franc may continue to limit the appreciation of the US dollar against the Swiss franc, especially as market expectations for the Swiss central bank's policies strengthen. Secondly, the US dollar may still remain relatively strong due to the political expectations of Trump's upcoming inauguration and the impact of the Federal Reserve's monetary policy.

In the short term, the US dollar against the Swiss franc may continue to fluctuate and consolidate around 0.9100. If it further falls below the support level of 0.9000, it may test lower levels. However, if the US dollar breaks through the current technical resistance level of 0.9244, it may once again test the price range of 0.9300 or even higher upwards. Therefore, market participants should pay attention to the specific content of Trump's economic policies and the possible monetary policy decisions that the Swiss National Bank may make in the future, which will directly affect the future trend of the US dollar against the Swiss franc.