USD/CHF Struggles to Break Above 0.8850 Resistance Amid Tariff Uncertainties
The USD/CHF pair encountered resistance during European trading hours on Tuesday, as the Swiss Franc (CHF) ticked lower against the US Dollar (USD). Despite US President Donald Trump signaling that some countries may be exempted from the tariffs he is set to announce on April 2, the USD failed to gain further ground.
USD/CHF Technical Analysis
From a technical standpoint, the USD/CHF pair has been trading within a narrow range between the 0.8750 and 0.8850 levels for the past few sessions. The pair attempted to break above the 0.8850 resistance level on Tuesday but was met with sellers. The Relative Strength Index (RSI) also indicates that the pair is neither overbought nor oversold, further suggesting a range-bound market.
US President’s Tariff Announcement
The US President’s announcement of tariffs on imported steel and aluminum has caused uncertainty in the forex market. The USD/CHF pair’s struggle to break above the 0.8850 resistance level can be attributed to this uncertainty. Traders are waiting for more details on which countries will be exempted from the tariffs and how they will be implemented.
Impact on the Market
- The USD/CHF pair’s inability to break above the 0.8850 resistance level could lead to further downside pressure on the pair, with potential support levels at 0.8750 and 0.8700.
- The Swiss Franc could strengthen against the USD if the uncertainty surrounding the US tariffs persists, making it an attractive safe-haven currency.
- The US Dollar could weaken against other major currencies if the tariffs lead to a trade war, as other countries may retaliate with their own tariffs.
Impact on Individuals and Businesses
The impact of the USD/CHF pair’s struggle to extend its upside and the US tariffs on individuals and businesses could be significant:
- Businesses that import steel or aluminum into the US could face higher costs, making their products more expensive and potentially less competitive in the market.
- Traders and investors could see increased volatility in the forex market as they navigate the uncertainty surrounding the US tariffs and their impact on the global economy.
- Consumers could see higher prices for goods that contain steel or aluminum, such as cars, appliances, and construction materials.
Conclusion
The USD/CHF pair’s struggle to extend its upside above the 0.8850 resistance level during European trading hours on Tuesday can be attributed to the uncertainty surrounding US President Donald Trump’s tariff announcement. The technical analysis suggests that the pair could see further downside pressure if it fails to break above this level. The potential impact on individuals and businesses could be significant, with potential higher costs for importers, increased volatility in the forex market, and higher prices for consumers.
As more details emerge about the US tariffs and their impact on the global economy, it is important for individuals and businesses to stay informed and adjust their strategies accordingly. The forex market is likely to remain volatile in the coming days, and traders and investors should be prepared for potential market swings.
