USD/CHF retreats toward 0.8000 as FOMC minutes hint at additional rate cuts ahead

FUNDAMENTAL OVERVIEW:

The USD/CHF pair pulls back toward the 0.8000 level during late European hours on Thursday, easing from Wednesday’s monthly high of 0.8030. The correction comes as the U.S. Dollar (USD) struggles to maintain upward momentum following the release of dovish Federal Open Market Committee (FOMC) minutes from the September meeting.

At the time of writing, the U.S. Dollar Index (DXY)—which measures the Greenback against six major currencies—trades 0.1% lower near 98.70, retreating from a fresh two-month peak of 99.00 reached on Wednesday amid heightened political uncertainty in France.

The FOMC minutes indicated that policymakers see room to further ease monetary policy through the rest of 2025, citing “increased downside risks to employment” and waning inflation pressures. The Fed’s dot plot from September projected the federal funds rate at 3.6% by year-end, implying two additional rate cuts this year.

Data from the CME FedWatch Tool shows markets pricing in a strong likelihood of another rate cut at this month’s meeting, with a 78.6% probability of one more in December. Traders now await remarks from Fed Chair Jerome Powell at the Community Bank Conference in Washington, scheduled for 12:30 GMT.

Meanwhile, in Switzerland, caution persists over whether the Swiss National Bank (SNB) could venture into negative interest rate territory. SNB Chairman Martin Schlegel recently warned that inflation expectations may accelerate in the coming quarters and noted that negative rates could negatively affect pensioners and financial institutions.

USD/CHF TECHNICAL ANALYSIS CHART:

Technical Overview:

USD/CHF is trading within an up channel.

USD/CHF is moving above all the Moving Averages (SMA).

The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Neutral trend.

Immediate Resistance level: 0.8067

Immediate support level: 0.7993

HOW TO TRADE USD/CHF

After a steep decline, USD/CHF established strong support and rebounded sharply, breaking above a key resistance level with solid bullish momentum. The pair has since retested the support zone and is displaying renewed strength and upward momentum. If USD/CHF holds above this level, it could extend its rally toward the next major resistance area.

TRADE SUGGESTION- LIMIT BUY– 0.8004, TAKE PROFIT AT- 0.8041, SL AT- 0.7987.