USD/CHF Falls to 0.7930 as U.S. Shutdown Deepens and Swiss Franc Strengthens
USD/CHF slipped to 0.7930 in the European session today as the US government shutdown continues to weigh on the market.
Quick overview
- USD/CHF fell to 0.7930 amid ongoing US government shutdown concerns, impacting market sentiment.
- This marks the 15th government shutdown since 1981, raising fears of economic slowdown and eroding confidence in the US dollar.
- The Swiss Franc is gaining strength due to positive inflation outlooks from SNB Chairman Martin Schlegel.
- Technically, USD/CHF has broken below key support levels, indicating bearish momentum with potential further declines.
USD/CHF slipped to 0.7930 in the European session today as the US government shutdown continues to weigh on the market. The impasse between Republicans and Democrats over a short term spending bill has created anxiety and the US Dollar Index (DXY) fell to 97.40, its lowest level in a week.
This is the 15th government shutdown since 1981 and the second under President Donald Trump. Investors fear an extended closure could slow down economic activity, disrupt key data releases and further erode confidence in the world’s reserve currency. Trump’s warning of “irreversible cuts” to Democrat-backed programs only added to the uncertainty and made the Dollar more bearish.
Swiss Franc Strengthens on Inflation Outlook
The Swiss Franc is outperforming its peers as SNB Chairman Martin Schlegel said inflation will “accelerate” in coming quarters. He mentioned stable growth and the possibility that ultra-loose monetary policy may not need to be extended.
This is good for the Franc at a time when global investors are already reducing their risk exposure. Schlegel mentioned potential headwinds from US pharma tariffs but the overall tone was positive and kept the Franc bid even as other currencies struggled.
USD/CHF Technical Outlook and Trade Setup
From a technical perspective, USD/CHF has broken below the 0.8000 handle and the rising channel that guided price action since September. A series of lower highs since September 23 and the three black crows pattern on the 4-hour chart show bearish momentum.
- 0.7955 is the 50-EMA.
- 0.7983 is the 100-EMA.
- Support zones are at 0.7911, 0.7883 and 0.7855.
The RSI is 38 and not oversold yet. There’s still room for the decline to continue.
Trade: For beginners, wait for a break below 0.7910 with targets at 0.7883 and 0.7855. Stop-loss above 0.7960 (above 50-EMA) to avoid getting caught long on a bounce.
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