Morning Note: USD/CHF Eyes Swiss Inflation; Bitcoin Soars Past $100K

USD/CHF in Focus Ahead of Switzerland Inflation Data

The expected release of the December CPI report on Tuesday has heightened focus on Switzerland’s deflationary trends. The inflation rate fell by 1.1% for two consecutive months, and the December inflation figure is also expected to be -0.1%. A weaker-than-expected inflation figure could further weaken the Swiss Franc.

(Switzerland’s Inflation Chart, Source: Federal Statistical Office)

The Swiss National Bank’s (SNB) interest policy has been radically changed due to dropping inflation. Currently, the policy rate is 0.50%, but the SNB may reinstate negative rates if the inflation rate drops further below target.

From the technical analysis perspective, the USD/CHF currency pair has retested the previously broken resistance level, which now serves as crucial support, preventing the price from dropping further. The valid bullish structure, characterised by higher highs and higher lows, suggests a strong likelihood of continued upward movement.

(USD/CHF H4 Price Chart, Source: Markets.com)

Bitcoin Breaks $100,000 as 2025 Begins

Bitcoin started 2025 on a strong note, surpassing the $100,00 milestone again. For the past nine weeks, MicroStrategy continuously purchased Bitcoin, which contributed to the bullish sentiment regarding the currency. Currently, MicroStrategy possesses 447,470 BTC, which were purchased for a total value of $27.97 billion.

Moreover, it’s possible that the 20th of January, which marks Donald Trump's inauguration, has also aided the increase in Bitcoin's price. As Trump has hinted at establishing a Bitcoin fund for the United States, optimism regarding cryptocurrency has increased.

In terms of price action, Bitcoin's price recently broke through the $99,500 resistance zone but was temporarily rejected at the $102,500 level. It’s possible to encounter a short-term retracement to retest the $99,500 support level before a potential rally toward the all-time high of $108,000.

(BTC/USD H4 Price Chart, Source: Markets.com)

U.S Dollar Drops as Tariff Plan Unfolds

The U.S. dollar hovered near a one-week low against major peers following a report by The Washington Post that Trump's aides were exploring plans to impose tariffs only on sectors deemed critical to U.S. national or economic security. Trump's proposed 10-20% universal tariffs were widely considered unlikely to materialise in such a stringent form, and the report has reinforced this view, even as Trump downplayed it.

From the technical analysis, the U.S. Dollar Index has experienced significant bearish momentum but found support and rebounded from a key support zone. However, it is currently retesting the previously broken bullish trendline. If it fails to break through this trendline, the overall trend could turn bearish, potentially driving the price downward.

(U.S Dollar Index H4 Chart, Source: Markets.com)

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.