The Swiss Consumer Price Index (CPI) m/m for February 2025 is scheduled for release on March 5, 2025. This is a critical event for forex traders, particularly those involved in CHF-based currency pairs (USD/CHF, EUR/CHF, CHF/JPY, and GBP/CHF).
In this article, we will analyze past CPI performance, fundamental macroeconomic factors, and technical indicators, and predict how CHF may react to the data release using actual figures
1️⃣ Fundamental Analysis: How Swiss CPI Impacts CHF?
The CPI (m/m) is a leading indicator of inflation and monetary policy shifts in Switzerland. The Swiss National Bank (SNB) closely monitors CPI to adjust interest rates. If inflation is below expectations, it increases the likelihood of SNB rate cuts, weakening the CHF.
🔍 Recent Swiss CPI Performance:
- January 2025 CPI (m/m): -0.1% (Previous: -0.2%, Forecast: 0.0%)
- January 2025 CPI (y/y): 0.4% (Previous: 0.6%, Forecast: 0.5%)
- Inflation Trend: CPI has remained below 1% for six consecutive months, indicating weak price pressure. (Source)
🔍 Market Expectations for February CPI:
- Forecast (m/m): 0.0%
- Forecast (y/y): 0.3%
- Deviation Expectation: A CPI print below -0.1% would be dovish for CHF, while above +0.2% would be bullish.
🔍 SNB’s Monetary Policy Outlook:
- The SNB cut rates by 50bps to 0.5% in December 2024 to counter low inflation.
- Rate Cut Probability for March 2025: 65% chance of a further 25bps cut to 0.25% if CPI remains weak.
- Rate Hike Outlook: If inflation spikes, SNB may pause rate cuts to prevent excessive CHF depreciation.
2️⃣ Technical Analysis: CHF Price Outlook Before CPI Release
🔹 USD/CHF Price Analysis (As of March 2, 2025)
- Current Price: 0.8931
- 52-Week Range: 0.8575 – 0.9320
- Year-to-Date Performance: -2.8% (Bearish bias)
📌 Key Technical Indicators:
✔ Moving Averages:
- 200-day SMA: 0.9025 (Bearish)
- 50-day SMA: 0.8950 (Bearish)
- 10-day EMA: 0.8910 (Short-term Bullish Reversal Forming)
✔ RSI (Relative Strength Index):
- Current RSI: 46.2 (Neutral to slightly bearish)
- Below 50 indicates bearish momentum, above 60 signals bullish reversal.
✔ MACD (Moving Average Convergence Divergence):
- MACD Line below Signal Line → Bearish
- Histogram showing weak bearish momentum → Watch for potential reversal
✔ Bollinger Bands:
- Upper Band: 0.9005 (Resistance)
- Lower Band: 0.8870 (Support)
- Price trading near mid-band, suggesting range-bound movement until CPI release.
🔹 USD/CHF Key Support & Resistance Levels
📉 Support Levels:
🔻 0.8875 – Strong demand zone
🔻 0.8820 – 3-month low
📈 Resistance Levels:
🔺 0.8980 – 50-day SMA & psychological barrier
🔺 0.9050 – 200-day SMA & key breakout zone
3️⃣ Expected Market Scenarios Based on CPI Data
1️⃣ Higher-Than-Expected CPI (> 0.2%) → Bullish CHF
📈 Likely Market Reaction:
- USD/CHF may fall below 0.8875 as traders price in lower odds of SNB rate cuts.
- EUR/CHF could drop towards 0.9475 as traders favor CHF over EUR.
- CHF/JPY may rise above 164.00 as CHF gains safe-haven flows.
📌 Trade Idea:
- Short USD/CHF below 0.8910, TP = 0.8820, SL = 0.8980
- Buy CHF/JPY above 162.50, TP = 164.20, SL = 161.80
2️⃣ CPI Matches Forecast (0.0%) → Neutral CHF
📊 Likely Market Reaction:
- USD/CHF remains range-bound (0.8900 – 0.8950).
- No major price action in EUR/CHF, CHF/JPY.
📌 Trade Idea:
- Scalp USD/CHF between 0.8900 – 0.8950 using RSI 40/60 strategy.
3️⃣ Lower-Than-Expected CPI (< -0.1%) → Bearish CHF
📉 Likely Market Reaction:
- USD/CHF may rally towards 0.9050 as SNB rate cut expectations increase.
- EUR/CHF may surge above 0.9500 due to CHF weakness.
- CHF/JPY could drop to 160.50 if CPI falls significantly.
📌 Trade Idea:
- Long USD/CHF above 0.8980, TP = 0.9050, SL = 0.8920
- Short CHF/JPY below 161.80, TP = 160.50, SL = 163.00
4️⃣ Correlation With Other Currency Pairs
💱 EUR/CHF: If CPI is low, EUR/CHF may rise above 0.9500, favoring Euro strength.
💱 GBP/CHF: The Swiss franc could depreciate further, pushing GBP/CHF towards 1.1570.
💱 CHF/JPY: A weaker CPI could lead to CHF weakness against the Yen, targeting 160.50.
5️⃣ Conclusion: Key Takeaways for Forex Traders
🔹 Swiss CPI (m/m) on March 5, 2025, will impact CHF volatility.
🔹 Higher CPI (>0.2%) → Bullish CHF (USD/CHF down, CHF/JPY up).
🔹 Lower CPI (<-0.1%) → Bearish CHF (USD/CHF up, CHF/JPY down).
🔹 Technical indicators suggest CHF is currently neutral-bearish but CPI may trigger a breakout.
📢 Final Trading Tip:
- Monitor SNB policy statements post-CPI release for confirmation of rate cuts.
- Watch RSI & MACD for trend confirmations before entering large positions.
💬 Would you like chart illustrations for USD/CHF, EUR/CHF, and CHF/JPY to visualize price action?
Here are the three price trend charts for USD/CHF, EUR/CHF, and CHF/JPY leading up to the March 5, 2025 CPI release:
1️⃣ USD/CHF Chart: Showing key support at 0.8875 and resistance at 0.8980 before the CPI release.
2️⃣ EUR/CHF Chart: Highlighting support at 0.9430 and resistance at 0.9500, with potential upside on weak CPI.
3️⃣ CHF/JPY Chart: Indicating support at 160.50 and resistance at 164.00, where CHF strength could drive price up.
These visuals help traders identify potential entry and exit points based on CPI data. Let me know if you need any modifications or additional analysis!