USDCHF could be in for a reversal from its downtrend, as the pair formed a double bottom after making a couple of failed attempts to break below the .8750 minor psychological mark.

The neckline resistance is slightly above the .8850 level, so a break above this could set off a climb that’s the same height as the formation or around 100 pips to .8950 or higher. The 100 SMA is below the 200 SMA, though, so the path of least resistance is to the downside or the selloff is more likely to resume than to reverse.

Stochastic is turning higher to suggest a pickup in bullish pressure, possibly enough to take USDCHF back to the neckline resistance. If it holds as a ceiling, however, price could resume the drop to the lows and proceed to move sideways in a range.

RSI appears to be closing in on the overbought zone to signal exhaustion among buyers soon, so turning lower would confirm that sellers are ready to take over.

USDCHF got a boost from the SNB decision to cut interest rates by 0.25% as expected to their lowest level since September 2022 in an effort to discourage inflows to the franc. Meanwhile, the dollar is also under bearish footing following the FOMC statement, as the Fed implemented an indirect form of easing by scaling down its quantitative tightening program.

There are no major reports due from both the US and Switzerland in the upcoming trading sessions, leaving overall market sentiment as the main driver of price action. However, risk-off flows could continue to benefit the safe-haven US dollar since the SNB appears keen on keeping the franc weak in order to keep export activity supported.

Geopolitical conflict in the Middle East and signs of an accord between the US and Russia could further stoke dollar demand, despite a more cautious Fed outlook.