USD/CHF Forecast as the VIX Index and DXY Roars Back

The USD/CHF price soared to the highest point since August 5 as the market volatility and the US dollar jumped. The pair rose to a high of 0.9650, which was about 2.94% above the lowest level in August of this year. 

Volatility rises

The USD/CHF price has been in a strong bullish trend in the past few days as signs of volatility in the market emerged. 

The closely watched CBOE Volatility Index (VIX) rose by over 13% on Monday, the biggest increase in months. At the same time, the US dollar index, which tracks the performance of the greenback against a basket of currencies, rose to $108.85, which was the highest level since July 14th.

Additionally, US Treasury yields soared to the highest point in months while stocks and cryptocurrency prices retreated sharply. Bitcoin dropped to $21,250 while the total market cap of all cryptocurrencies dropped to $1 trillion. 

The USD/CHF price rally accelerated after the Federal Open Market Committee (FOMC) published the minutes of its last meeting. The minutes showed that most members believed that the bank should continue hiking interest rates in the coming months to prevent inflation from being entrenched permanently in the economy. 

Meanwhile, there are signs that the Swiss National Bank (SNB) will not hike interest rates further. The bank surprised the market earlier this year when it decided to hike interest rates by 0.50%. It was the first time the bank hiked interest rates in more than a decade. 

USD/CHF forecast 

The three-hour chart shows that the USD to CHF exchange rate has been in a strong bullish comeback in the past few days. The pair rose to a high of 0.9650, which was the highest point since August 5.

The USDCHF price rose above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) moved above the neutral point. Therefore, the pair will likely continue rising as bulls target the next key resistance level at 0.9700.