USD/CHF consolidates as Fed rate cut expectations cap franc weakness

USD/CHF is maintaining a narrow range around 0.8450, with the Swiss franc's bearish bias limited by evolving Federal Reserve policy expectations. The pair has struggled to sustain upward momentum despite underlying franc weakness, as markets price in potential Fed rate cuts later this year. Technical analysis reveals immediate resistance at 0.8480, coinciding with the 50-day moving average, while support holds at 0.8420. The correlation with US 2-year Treasury yields remains strong, with any decline in yields likely to pressure USD/CHF lower. Safe-haven flows continue to provide intermittent support for the franc during risk-off episodes. The Swiss National Bank's dovish stance contrasts with the Fed's data-dependent approach, creating a complex dynamic for the pair. Traders should watch upcoming US inflation data and Fed communications for directional catalysts, with a break above 0.8480 potentially opening the path to 0.8520.