USD/CHF: Near term bounce not ruled out – OCBC

USD/CHF rebounded overnight off its multi-week lows of sub-0.80. Pair was last at 0.7975 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD/CHF may remain a sell-on-rally

"There were 2 remarks from SNB President Schlegel in a recent interview worth highlighting. One, he noted that the bar is very high for reintroducing negative interest rates, given the harmful effects on savers and pension funds. He emphasised that negative rates would only be considered under exceptional circumstances. With policy rate currently at 0, this may suggest that policy easing is not on the table at the upcoming meeting on 25 September."

"Two, he indicated that the franc has mainly appreciated against the dollar. In real terms, however, the appreciation is not as great as it seems at first glance. Such rhetoric implies less of a ceiling on CHF strength and with SNB reluctant to counter appreciation, USD/CHF may remain a sell-on-rally (should USD softness persists)."

"Mild bearish momentum on daily chart intact while RSI rose from near oversold conditions. Bearish crossover observed with 21 cutting 50 DMA to the downside. Bias to sell rallies. Resistance at 0.8020 (21, 50 DMAs, 50% fibo retracement of Jul low to Aug high), 0.8060 (38.2% fibo). Support at 0.7920 (recent low), 0.7870 (2025 low)."