USD/CHF bounces over 1% as trade optimism lifts mood, but Powell tensions linger

• USD/CHF rebounds from 0.8065 as Bessent and White House signal progress in China, Japan, and India trade talks.
• Market sentiment improves sharply, but Trump's attacks on Powell continue to cloud Fed's credibility.
• Technicals show 0.8200 as key level; break higher may target 0.8267 and 0.8400, while failure risks drop to 0.8038 or lower.

The USD/CHF makes a U-turn and trade with gains of over 1% on Tuesday as market mood improved on trade headlines and a possible de-escalation of US-Sino conflict tensions. At the time of writing, the pair trades at 0.8181 after hitting a daily low of 0.8065.

USD/CHF rallies to 0.8181 on China de-escalation hopes; Fed independence concerns still threaten upside momentum

The White House revealed that progress is being made on trade deals, with Karoline Leavitt saying the "ball is moving int the right direction with China." Meanwhile, Politico revealed that the WH is nearing agreements with Japan and India.

The US Treasury Secretary Scott Bessent said he saw a de-escalation with China during a closed-door meeting in Washington, according to Bloomberg. Against this backdrop, Wall Street rallied sharply, the USD/CHF erased Monday's losses, and closed near the week's high of 0.8190.

Nevertheless, the USD/CHF bulls are not out of the woods following US President Trump's recent attacks on Fed Chair Jerome Powell. An escalation of the rhetoric would put the Fed's independence into question, spurring flows out of the Greenback's safe-haven status.

USD/CHF Price Forecast: Technical outlook

The USD/CHF downtrend remains intact, but buyers driving the exchange rate near 0.8200, could exacerbate a rally towards April's 14 peak of 0.8267. A breach of those levels will expose 0.8300, followed by a move to the 0.8400 figure

Conversely, if USD/CHF closes below 0.8200, look for a test of the 0.8100 ahead of the April 21 low of 0.8038. If surpassed, the pair could reach the 0.79 handle for the first time since September 2011.

Conversely, buyers need to reclaim the April 21 peak of 0.8163 so they can challenge the next resistance level, the April 14 swing high of 0.8267.