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USD/CHF Price Analysis as it Matches Towards Parity

The USD/CHF price soared to the highest point since June this year as the dollar strength continued. It rose to a high of 0.9956, which was about 5.83% above the lowest level this year. It has jumped by more than 8.74% this year.

Fed and SNB convergence

The USD to Swiss franc exchange rate has been in a strong bullish trend in the past few weeks as the Fed and SNB converge. In the United States, the Federal Reserve has embraced a more hawkish tone in a bid to fight elevated inflation. Last Wednesday, the bank hiked interest rates by 0.75% for the third time this year and hinted that it will hike by another 125 basis points this year.

The Swiss National Bank has also caught many traders off-guard this year. After favoring a weak Swiss franc for years, the bank decided to hike interest rates by 0.50% in the second quarter. It then continued with its rate hike policy last week when it boosted interest rates by another 0.50%. The bank hinted that more rate hikes were on the way. 

The next key catalyst for the USD/CHF price will be a statement by Jerome Powell and important data from the United States like consumer confidence, durable goods orders, and new home sales numbers. Analysts expect the data to show that consumer confidence rose for the second straight month in September while new home sales numbers pulled back.

USD/CHF forecast

The daily chart show that the USD/CHF price has been in a strong bullish trend in the past few days. It managed to cross the important resistance level at 0.9871, which was the highest level on September 7 of this year. The pair has also moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved close to the overbought level.

Therefore, the USD to CHF price will likely continue rising as the US dollar strength continues. If this happens, the next key resistance level to watch will be parity at 1.00 followed by 1.0050. The stop-loss for this trade is at 0.9880.