USD/CHF is back at its 50DMA, a key battleground for bulls and bears. With price action taking the lead over fundamentals, traders are watching for a decisive move—will it break higher or roll over again?
By : David Scutt, Market Analyst
- USD/CHF retesting the 50DMA from below after last week’s drop.
- RSI, MACD signal downside risk, but morning star pattern hints at a rebound.
- Break above 0.9050 could open 0.9155, while failure risks a slide to 0.8920.
Summary
USD/CHF is again testing the 50-day moving average (DMA)—this time from below—offering potential trade setups depending on how price action evolves around this key level. With little on the economic calendar this week in either the US or Switzerland, and having temporarily disconnected from its primary driver of yield differentials, technical signals take on greater importance in assessing directional risks.
USD/CHF Battle Brewing at 50DMA?
Source: TradingView
The three-candle evening star pattern completed last week has so far led to only limited downside, but it did break through key levels—first shattering uptrend support established in September before slicing through the 50DMA. However, the move stalled ahead of the January 27 swing low of 0.8966 before rebounding to retest the 50DMA from below, forming a three-candle morning star pattern in the process—often seen near bullish turning points. That should have traders on alert for a potential break above the 50DMA.
However, RSI (14) continues to set lower lows, and MACD remains in a downtrend, generating a bearish signal on price momentum. As such, I remain neutral on directional bias. But with price hovering near the 50DMA—a level that’s often respected—it presents potential trade setups.
If USD/CHF fails to break and hold above the 50DMA, shorts could be established beneath the level, with a stop above horizontal resistance at 0.9050 for protection. Possible targets include 0.8966 and a support zone from around 0.8920 down to 0.8895.
Alternatively, if USD/CHF breaks and holds above the 50DMA, longs could be considered above 0.9050 with a stop beneath for protection. For this setup to work, the price would need to clear the former uptrend, putting a retest of the February 12 swing high at 0.9155 and the recent cycle peak of 0.9200 in play.
Click the website link below to read our exclusive Guide to EUR/USD trading in 2025
https://www.forex.com/en-us/market-outlooks-2025/FY-eur-usd-outlook/
CHF Disconnects from Yield Differentials
Source: TradingView
Unlike in the recent past, USD/CHF has shown little correlation with US Treasury yields or US-Swiss yield differentials across various tenors over the past month. It still retains a relatively strong correlation with EUR against the USD, though that’s been weakening.
With little major event risk on the calendar in either nation this week, traders may want to place greater emphasis on price signals when assessing potential setups.
– Written by David Scutt
Follow David on Twitter @scutty
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.