USD/CHF has climbed 2.8% in 20 sessions and set a 60-day high at 0.8358, driven by a Fed that is hiking while the SNB holds at 0.00%. RSI near 74 flags stretched conditions, so TNFX Research expects a dip toward 0.8276 to hold rather than mark a top, with 0.8420 the end-October target.
This week: Overbought, so a dip toward 0.8306-0.8276 is likely before NFP on 2 Oct. A firm print targets the 1-week sigma high at 0.8400; holding 0.8276 keeps the trend intact.
End of October: Base case: an end-October close near the weekly R2 at 0.8420 if the Fed hikes on 28 Oct, with no SNB meeting until 10 Dec. Below 0.8226 the call fails.
Key levels
Resistance
- R10.83580
- R20.84200
- R30.84950
Support
- S10.82760
- S20.82260
- S30.81910
Scenarios
- Trigger
- Hot NFP and CPI, then a 28 Oct Fed hike with more signalled
- Target
- 0.84950
The trend extends past 0.8420 (weekly R2) to 0.8495 (last plus 3x ATR) as the gap with a 0.00% SNB widens further.
- Trigger
- NFP near consensus and the 28 Oct hike stays ~70-77% priced
- Target
- 0.84200
Overbought conditions bring a dip toward 0.8276 first, then buyers return and push the pair to the weekly R2 at 0.8420 by end-October.
- Trigger
- A weak NFP and soft CPI cut Fed hike odds and the franc regains its footing
- Target
- 0.82260
The stretched rally unwinds through 0.8276 to the weekly S1 at 0.8226, with the SMA20 at 0.8191 the next test.
What drives it
- Policy gap: Fed at 3.75-4.00% with a 28 Oct hike ~70-77% priced, against an SNB at 0.00% whose next decision is 10 Dec
- US 10-year above 5.2%, the highest since June 2007, widens the dollar's yield advantage over the franc
- Higher in each of the last three weeks to a fresh 60-day high at 0.8358; the old 0.8263 swing high now acts as support
- RSI 73.8 is overbought: expect consolidation before the next leg, not an automatic reversal
Dates to watch
US jobs report (NFP, September), 15:30 Mecca timeConsensus +90k, unemployment 4.1%. A firm print supports a push to 0.8400; a miss invites a deeper dip.
US CPI (September)August CPI was 3.4% y/y with energy +16.3%. A hot print keeps the rate gap widening.
FOMC decisionA second 25bp hike is ~70-77% priced; hawkish guidance would favour the bull scenario.
SNB decisionHeld at 0.00% on 24 Sep; with no meeting before 10 Dec there is no scheduled Swiss policy offset to Fed hikes in October.
Technical picture
Strong uptrend: price is well above the SMA20 (0.8191) and SMA50 (0.8133). RSI14 73.8 is overbought, so pullbacks are likely but are not a reversal signal on their own. ATR14 0.0052 (about 52 pips a day).
What would change our view
A daily close below 0.8226 (weekly S1) would signal the rally has failed. A soft NFP plus renewed demand for the franc could pull it back to the SMA20 at 0.8191.