Both the Federal Reserve and the Swiss National Bank are expected to leave interest rates unchanged when they announce their policy decisions on Wednesday and Thursday, respectively.
Meanwhile, the U.S. dollar is under pressure following news of a memorandum of understanding between the U.S. and Iran. That development triggered a gap lower in USDCHF, sending the pair below its 200-hour moving average, currently at 0.7950. A subsequent corrective bounce attracted willing sellers at that moving average, reinforcing the bearish bias and keeping sellers firmly in control. Since then, the pair has extended to fresh session lows in North American trading.
The latest decline tested a former resistance zone between 0.7923 and 0.7926. That area acted as a ceiling on multiple occasions, including April 9, April 29-30, and again on June 3, before finally giving way on June 5. Now that the market has returned to the zone, buyers are attempting to defend it. However, a decisive break below 0.7923 would shift focus toward the next key support area between 0.7901 and 0.7905. That zone is home to the 50% retracement of the April-to-May decline at 0.7901 and the 200-day moving average at 0.7905, making it an important technical battleground.
Looking back to last week, USDCHF rallied into a key swing area just above the natural resistance level at 0.8000. Sellers leaned against the zone between 0.8009 and 0.8018, helping to cap the advance after the pair peaked at 0.8012. The subsequent reversal pushed the price back below its 100-hour moving average, now near 0.7970, adding to the bearish technical picture.
The progression has been clear:
• Sellers defended the swing area above 0.8000.
• Sellers pushed the price below the 100-hour moving average.
• Sellers drove the pair below the 200-hour moving average.
The next test is the former resistance zone at 0.7923-0.7926. Can sellers force a break and maintain momentum below that level? If they can, the path toward the 200-day moving average and the 50% retracement target becomes increasingly likely.
