The USD/CHF price declined slightly in the overnight session as traders reacted to the signing of the American stimulus package and the Swiss economic forecast. The pair is trading at 0.9265, which is slightly below this week’s high of 0.9374.
What happened: After weeks of debates, the House of Representatives passed the final version of the $1.9 trillion stimulus package on Wednesday. And yesterday, Joe Biden signed the bill into law, meaning that the Treasury Department will start funneling the funds this week.
The USD/CHF price is also reacting to the latest Swiss economic forecast. A report by the Secretariat for Economic Affairs said that the economy will bounce back this year after seeing a significant contraction in 2020. They expect the economy to grow by 3% this year as the number of coronavirus cases falls as the government implements its vaccination process. It contracted by 2.9% in 2020.
Still, the agency expects the economy to contract slightly in the first quarter because of the lockdowns.
The three-hour chart shows that the USD/CHF was previously in an upward trend. It formed an ascending channel between February and March. This year, the pair managed to move below the lower side of the channel. Also, it seems to have formed a head and shoulders pattern whose neckline is at 0.9273.
Also, the pair has moved below the 25-period and 15-period exponential moving averages (EMA). Therefore, the pair may continue to decline as bulls target the 38.2% Fibonacci retracement level at 0.9183. However, an increase above 0.9300 will invalidate this prediction.
USDCHF technical chart