• The USD/CHF differential continues to widen as the US Dollar gains strength and the Swiss Franc swoons.
• The SNB's dovish pivot last week continues to drain investor interest in bidding up the CHF.
• The Swiss National Bank held off on further rate hikes last Thursday amidst slumping Swiss inflation data.

The USD/CHF is pinned to the high side in Monday trading, reaching the 0.9130 region. Another move higher will have the pair testing into new five-month highs.

Last week, the Swiss National Bank (SNB) was unceremoniously knocked off its rate hike cycle, surprising markets and flubbing investor expectations when the SNB failed to raise rates another 25 basis points last Thursday.

Inflation figures for the Swiss domestic economy have been unwinding much faster than the SNB initially thought, and the Swiss central bank was forced to pull the plug on its current rate hike schedule.

Central bank tone determining market momentum with rates unmoving

The Greenback (USD) continues to firm up in markets, bolstered by last week's hawkish Federal Reserve (Fed) showing; while both central banks held rates steady last week, it's the Fed that gets the benefit of the doubt in markets, with the US central bank seeing interest rates staying higher for longer than previously forecast.

This week sees a quiet start to things on the economic calendar, with mid-tier data on offering until Thursday's US Gross Domestic Product (GDP) printing.

Tuesday will bring US housing and consumer confidence figures, while CHF traders will want to keep an eye on Wednesday's ZEW sentiment expectations and the SNB's quarterly bulletin.

USD/CHF technical outlook

Bullish momentum for the US Dollar is pushing the USD/CHF pair higher, and hourly candles are accelerating into the top end. The pair is up over 2% from last week's low near 0.8930, and a fresh push higher will put the pair into new five-month highs.

Daily candlesticks see the USD/CHF pushing above the 200-day Simple Moving Average (SMA) which currently sits near 0.9050, and the 34-day Exponential Moving Average (EMA) has turned bullish, crossing over the 100-day SMA near 0.8900 and set to give prices technical support.

The next significant resistance zone sits at March's swing highs near the 0.9400 handle.

USD/CHF daily chart

USD/CHF technical levels