USD/CHF rises as US trade optimism fades and Swiss Franc weakens on risk sentiment

• USD/CHF extends gains as US Dollar benefits from positive trade deal headlines.
• US jobless claims drop to 228K, supporting broader USD strength.
• Technical indicators show key resistance at 0.9050 and support near 0.8900.

The USD/CHF pair is trading higher as the US Dollar (USD) gains momentum on mixed economic signals and trade optimism, while the Swiss Franc (CHF) weakens amid broader risk-on sentiment. US President Donald Trump announced a "major trade deal" with the United Kingdom (UK), though initial excitement cooled after reports indicated that a 10% tariff on UK goods would remain in place, limiting the potential economic boost from the agreement.

The US Dollar Index (DXY) remains firm, trading near 100.00 as investors digest positive economic data and trade headlines. US initial jobless claims fell to 228K for the week ending May 3, down from 241K in the previous week, signaling a resilient labor market. Meanwhile, the Bank of England (BoE) cut its benchmark interest rate by 25 basis points to 4.25%, further supporting the USD as the yield differential widens.

In Switzerland, the economic outlook remains clouded as global trade uncertainties persist. The Swiss National Bank (SNB) has maintained a cautious stance, with recent data suggesting muted inflation pressures. This divergence in monetary policy has weighed on the CHF, making it less attractive in the current risk-on environment.

Technical Analysis

From a technical perspective, USD/CHF is testing resistance near 0.9050, with additional barriers at 0.9080 and 0.9100. On the downside, support is seen at 0.9000, followed by 0.8950 and 0.8900. The RSI is in neutral territory, reflecting a balanced outlook, while the MACD shows a bullish crossover, indicating potential for further gains. However, longer-term moving averages like the 100-day SMA (0.8920) and 200-day SMA (0.8880) suggest a cautious longer-term outlook, highlighting the importance of sustained upward momentum for a meaningful breakout.

In summary, USD/CHF remains supported by a combination of robust US economic data and dovish signals from European central banks. However, traders should monitor incoming data and geopolitical headlines for potential volatility in the coming sessions.

Daily Chart