- USD/CHF rises to near 0.7825 as Iran truce optimism has diminished the US Dollar’s safe-haven demand.
- US President Trump has stated multiple times that Washington is close to reaching a deal with Iran.
- The Fed is unlikely to raise interest rates this year.
The USD/CHF pair trades 0.15% lower at around 0.7825 during the European trading session on Friday. The Swiss Franc pair faces selling pressure as optimism towards a permanent ceasefire between the United States (US) and Iran has diminished the appeal of safe-haven assets.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% lower to near 98.08. The DXY is close to its over six-week low of 97.83 posted on Thursday.
The hopes of an Iran truce remain firm as US President Donald Trump has stated multiple times that Tehran is eager to reach a deal soon. On Thursday, Trump said in a press briefing, “We’re very close to a deal with Iran,” while warning that military actions against Tehran would resume if a deal is not closed. Trump added that Iran is willing to give up its enriched uranium and surrender its plans to pursue nuclear ambitions.
On the domestic front, traders have completely pared hawkish Federal Reserve (Fed) for the year, as capped oil prices due to Iran truce optimism have again anchored inflation expectations globally.
USD/CHF technical analysis
USD/CHF trades lower at around 0.7825 as of writing, keeping a bearish near-term tone as it holds below the 20-period exponential moving average (EMA) at 0.7883. On the daily chart, the pair exhibits a Bearish Flag formation, which warrants the continuation of the downside trend after a period of consolidation.
The Relative Strength Index (14) at around 42 leans to the weak side and hints that rebounds may continue to struggle beneath overhead supply.
On the downside, the channel bottom around 0.7798 is the first line of support, and a clear move below that floor would expose a deeper retracement within the broader bearish structure defined by the longer-term downward trend line towards the March 10 low of 0.7748, followed by the February 23 low of 0.7710.
Looking up, initial resistance emerges at the channel top near 0.7850, followed by the 20-period EMA at 0.7883; a sustained break above these levels would be needed to ease immediate downside pressure and extend the recovery towards the April 13 high of 0.7934.
