United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that USD/CHF has staged an overdone rally toward 0.8265 and now expect the pair to consolidate between 0.8225 and 0.8275 in the near term. Over the next 1–3 weeks, momentum remains strong but may not yet be sufficient to break above 0.8300, with 0.8185 flagged as key downside support.

Pair seen consolidating below 0.8300

“24-HOUR VIEW: Yesterday, we held the view that USD “could rise above the major resistance at 0.8205.” However, we highlighted that “based on the current momentum, it may not be able to maintain a foothold above this level.” We added, “the next resistance at 0.8245 is also unlikely to come into view.” We did not expect the rapid upward acceleration as USD rallied to a high of 0.8265. The sharp rally appears to be overdone, and USD is unlikely to rise much further. Today, USD is more likely to consolidate between 0.8225 and 0.8275.”

“1-3 WEEKS VIEW: In our most recent narrative from Tuesday (15 Sep, spot at 0.8175), we highlighted that USD “must break and hold above 0.8205 before a move to 0.8245 can be expected.” Yesterday, USD broke above both levels as it surged to 0.8265. While momentum remains strong, it is too early to tell whether it is sufficient for USD to break above 0.8300. On the downside, a breach of 0.8185 (‘strong support’ level was at 0.8145 yesterday) would mean that the upside momentum from late last week is easing.”