On Monday (March 17th), before the European market opened, the USD/CHF continued its volatile consolidation pattern from last week, facing a key pressure level test in the short term. The current fluctuations in the foreign exchange market are affected by the dual effects of weak global economic data and rising geopolitical risks, leading to an increase in market risk aversion. At the same time, the upcoming monetary policy meeting of the Federal Reserve is also affecting the nerves of the global market.

Fundamental analysis

Recently, market concerns about the economic outlook have been escalating. The retail sales data for February in the United States is about to be released, which will become a key indicator for measuring the health of the US economy. Analysts generally expect that the data may indicate a slowdown in consumer spending growth, which may put some pressure on the US dollar. In addition, the consumer confidence index has dropped to a nearly two-and-a-half-year low, while inflation expectations have increased, reflecting market concerns about the economic outlook.

The global geopolitical tensions have also intensified the market's demand for safe haven. The ongoing conflicts in the Middle East have driven demand for the safe haven currency, the Swiss franc, and put downward pressure on the US dollar/Swiss franc exchange rate.

It is worth noting that the Federal Reserve is expected to keep interest rates unchanged at Wednesday's meeting, within the range of 4.25% to 4.5%. The market generally expects two to three interest rate cuts this year, but if the Federal Reserve sends a hawkish signal that exceeds expectations, it may boost the US dollar in the short term.

Technical analyst interpretation:

From a technical perspective, the US dollar/Swiss franc is currently near key support levels. The daily chart shows that the exchange rate is hovering around the level of 0.8841, and the RSI indicator is currently at 38.80, in the neutral weak zone, but has not yet entered the oversold zone, indicating that the downward momentum is weakening.

In the short term, the MACD indicator shows that both the DIFF and DEA lines are below the zero axis, and the DIFF-0.0056 DEA-0.0051， The difference is -0.0010, indicating that bearish forces still dominate, but the momentum has weakened. It is worth noting that the RSI indicator on the 4-hour chart has rebounded from a low to 52.72, indicating a possible technical rebound in the short term.

The key resistance currently faced by the exchange rate is at 0.8864 and 0.8904. If it can break through 0.8864, it will open up upward space and is expected to challenge the level of 0.8904. The support below is located at 0.8806 and 0.8768. If it falls below 0.8768, it may trigger a new round of decline.

The Bollinger Bands indicator shows that the current mid track value is 0.8828, the upper track is 0.8861, and the lower track is 0.8795. The exchange rate is currently near the middle of the Bollinger Bands, indicating that it may maintain a volatile consolidation trend in the short term.

Future prospects

The US dollar/Swiss franc may continue to fluctuate within the range of 0.8768-0.8904 in the short term. If the US retail sales data falls short of expectations, coupled with the Fed's dovish stance, the exchange rate may test downward support. However, considering that technical indicators show signs of oversold weakening, there may be a technical rebound in the short term.

In the medium term, the exchange rate trend will mainly depend on the Federal Reserve's policy path and global risk sentiment. If economic data continues to perform poorly, market expectations for the Federal Reserve to accelerate interest rate cuts will increase, which may put further pressure on the US dollar. However, the rise in geopolitical risks may increase market volatility, leading to an increase in risk aversion and benefiting the strength of the Swiss franc.