USD/CHF Price Forecast: Strives to extend rally above 200-day EMA

• USD/CHF holds onto intraday gains near 0.8750 on US Trump's victory.
• Market participants are expected to face higher import tariffs in Trump's administration.
• The Swiss Franc pair rallies after breaking above 38.2% Fibo retracement at 0.8700.

The USD/CHF pair rallies to near 0.8750 in Wednesday's European session. The Swiss Franc pair surges to a fresh three-month high as the US Dollar (USD) soars with former President Donald Trump gaining an unconquered lead over Democratic rival Kamala Harris in the United States (US) presidential elections.

The US Dollar is one of the major beneficiaries of Trump's victory as he is expected to implement protectionist policies after taking the Senate in a way to boost domestic investment. Trump vowed to raise import tariffs by 10% and lower corporate taxes if he comes into power.

The US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, surrenders some of its intraday gains but is still 1.30% higher, around 104.80, at the time of writing.

Going forward, investors will focus on the Federal Reserve's (Fed) interest rate decision, which will be announced on Thursday. The Fed is expected to cut interest rates by 25 basis points (bps) to 4.50%-4.75%.

Meanwhile, the Swiss Franc (CHF) remains on the back foot against the US Dollar for more than a month as the Swiss National Bank (SNB) is expected to cut interest rates again in the last monetary policy meeting of this year in December.

USD/CHF delivers a sharp rally after breaking above the 38.2% Fibonacci retracement around 0.8700. The tool is plotted from May's high of 0.9225 to September 6 low of 0.8375. The Swiss Franc pair bounced back sharply after gaining ground near the 50-day Exponential Moving Average (EMA), which trades around 0.8617 and has rallied to near the 200-day, which hovers around 0.8750.

The 14-day Relative Strength Index (RSI) climbs above 60.00, suggesting a fresh bullish momentum in sight.

More upside looks likely towards the round-level resistance of 0.8800 and the July 25 high of 0.8850 after sustaining above the 200-day EMA.

On the flip side, a downside move below the 50-day EMA near 0.8617 will push the asset lower to a 23.6% Fibo retracement level near 0.8570, followed by the psychological support of 0.8500.

USD/CHF daily chart