On the daily chart below for USDCHF, we can see that after bottoming out at the 0.8858 support, the pair started to rally towards the 0.90 resistance as several better-than-expected US economic data made the market to rethink about the future interest rates path.

The first reaction to the Fed’s hint to a pause in June was bearish the US Dollar, but the Fed The Fed "The Fed" is a short-hand that refers to the Federal Reserve or Federal Reserve System, the central banking system of the United States. Traders often discuss the actions of the Fed, primarily interest rate decisions, as they significantly impact all financial markets.The Fed shouldn't be confused or substituted with the term "the Feds" and doing so tells everyone you're a total noob. The term "the Feds" refers to US Federal law enforcement, including such agencies as the FBI (Federal Bureau of "The Fed" is a short-hand that refers to the Federal Reserve or Federal Reserve System, the central banking system of the United States. Traders often discuss the actions of the Fed, primarily interest rate decisions, as they significantly impact all financial markets.The Fed shouldn't be confused or substituted with the term "the Feds" and doing so tells everyone you're a total noob. The term "the Feds" refers to US Federal law enforcement, including such agencies as the FBI (Federal Bureau of Read this Term has also left a door open for another hike in case the data remained strong.

In fact, the US data since the last FOMC meeting kept on beating forecasts beginning with a hot NFP report and continuing with a big jump in long term consumer inflation expectations, beats in retail sales, jobless claims and strong Services PMIs yesterday.

This may keep core inflation higher for longer and force the Fed to do more. We can see that USD/CHF is now threatening a breakout of the trendline and the 0.90 handle, and the moving averages have crossed to the upside. All else being equal, we may see USD/CHF at the 0.91 handle next.

USDCHF Technical Analysis

On the 4 hour chart below, we can see that the price has been respecting the upward trendline perfectly as we got bounces every time USD/CHF came there. The first breakout of the downward trendline and 0.90 resistance failed, but now the buyers may have the upper hand and take USD/CHF to the next resistance at 0.9118. The next data to watch is the US Jobless Claims report tomorrow and the US PCE on Friday. Beats to the forecasts should add more fuel to the USD/CHF rally.

On the 1 hour chart below, we can see that the price is struggling a bit above the 0.90 resistance as the market is caught between good US data and US debt ceiling headlines. On one hand, good data is strengthening the Dollar, but on the other hand negative news on the debt ceiling talks and the possibility of a US default weigh on the greenback.

Overall, the market expects that the debt ceiling will be raised eventually, so the negative news on that front are taken more as opportunities to buy the dips in USD/CHF.

Nonetheless, there’s still a risk and the technicals should help navigate the flows here. On the upside, a break above the swing high at 0.9030 should see the buyers piling in and target the 0.9118 resistance. On the downside, only a break below the upward trendline would give the sellers conviction to target the 0.8858 low.