Ella 
In early trading in the European market, USD/CHF found support after a sharp correction to near the 0.8600 integer support. USD/CHF is expected to fall further as the dollar’s bearish appeal increases due to the prospect of interest rate cuts from the Federal Reserve.
S&P 500 futures rose slightly in late Asian trading, reflecting market sentiment maintaining risk appetite. The U.S. Dollar Index (DXY) turned sideways after correcting to around 102.10. Increased focus among market participants on expectations for three interest rate cuts from the Federal Reserve in 2024 could keep the U.S. dollar index lower.
Looking ahead, investors will focus on the Swiss National Bank’s (SNB) fourth-quarter bulletin due on Wednesday. The fourth quarter communiqué will publish reports on monetary policy and business conditions, which will provide signals about the performance of the Swiss economy.
USD/CHF has continued its decline from the past two months and is expected to continue its decline towards support at the July 18 low of 0.8555. The 20-day EMA (Exponential Moving Average) at 0.8740 has been acting as resistance for the bulls.
The Relative Strength Index (14) has entered a bearish range between 20.00-40.00, which suggests that momentum is tilted to the downside.
If USD/JPY falls below the December 19 low of 0.8593, more downside will be on display. This would push USD/CHF closer to the July 18 low of 0.8555, followed by psychological support at 0.8500.
In addition, if USD/CHF rebounds above the high of 0.8711 on December 18, it will rise towards the high of 0.8750 on December 06. A break above this level would push USD/CHF towards further gains towards the August 03 high of 0.8800.
