The USD/CHF currency pair has experienced a recent surge, driven by Switzerland's underwhelming GDP data and encouraging consumer inflation statistics from the US ¹. The pair has risen to a high of 0.9090, representing a 9% increase from its lowest point this year. Despite the US and Switzerland releasing a series of weak economic numbers, the pair remains optimistic, with economists predicting interest rate cuts from the Federal Reserve and the Swiss National Bank later this year.

Switzerland's GDP growth has been sluggish, with a mere 0.2% increase in the first quarter, continuing a pattern of weakness over the past three quarters. This raises the likelihood of an additional rate cut at the bank's next meeting in June. The US, on the other hand, has seen inflation ease in April, with the headline and core Consumer Price Index (CPI) dropping to 0.3%. This decline, combined with weak economic data, may lead the Fed to consider cutting interest rates later this year, with the market anticipating two or three cuts.

The USD/CHF exchange rate has remained stable in recent days, trading at 0.9100, slightly above the 38.2% Fibonacci Retracement level. Technical analysis reveals a golden cross pattern, where the 50-day and 200-day Exponential Moving Averages (EMA) make a bullish crossover, indicating a positive trend. Additionally, an inverse head and shoulders pattern has formed, often a sign of a bullish outlook. As a result, the pair's prospects are moderately bullish, with the next target at 0.9225, the neckline of the H&S pattern and the 50% retracement point.

In conclusion, the USD/CHF pair is poised for a bullish upside, driven by expectations of interest rate cuts from both the Federal Reserve and the Swiss National Bank. Despite weak economic data from the US and Switzerland, the pair's technical indicators suggest a positive trend, making it an attractive opportunity for traders and investors.