USD/CHF soars and rises above 0.9500, ready to test March highs

• USD/CHF reaffirms uptrend, eyes 0.9530.
• SNB kept monetary policy unchanged, FOMC set to raise rates next week. 

USD/CHF moved all day with a clear bullish bias and accelerated to the upside, during the American session. The pair broke above 0.9500 and reached at 0.9516, the highest level in 6 days. 

Near the end of the session, it was holding near the highs. The US dollar was likely to post the highest daily close since mid-January. If the bullish tone persists the pair could test March highs located around the 0.9530 area. 

SNB and FED

On the day the Swiss National Bank, as expected, left its monetary policy stance unchanged the Swiss franc dropped across the board.  Analysts from ING think that the SNB will keep rates unchanged until late 2019 and will refrain from further FX interventions. “The economy is expected to rebound in 2018, which could lead to somewhat higher inflation and allow for some very gradual monetary tightening in late 2019. In this context, we expect the CHF to stay on a depreciation track.”

The greenback and the yen were the top performers. US data supported the greenback. Attention is turning to next week FOCM meeting. The central bank is expected to raise rates next Wednesday and market participants will also focus on staff forecast for rates (the dot plot). Will the Fed start signaling four rate hikes during 2018 instead of three? If so, the US dollar could rally. 

Technical levels 

The pair rebounded on an uptrend line, from February lows and reaffirmed the current tone. With Thursday’s rally price broke above a downtrend line, adding more support to the upside. 

In case USD/CHF continues to rise, resistance levels might be located at 0.9515/20 (Mar 15 high), 0.9530/35 (Mar high) and 0.9550. On the flip side, 0.9485 is the immediate support followed by 0.9450 (uptrend line) and 0.9420.