Volatility in CHF to USD as USDCHF Plunges, Safe Haves Surge

The volatility in the CHF to USD rate has resurfaced, with the pair being in a downward trend since May and losing 5 cents already.

Skerdian Meta•Friday, August 2, 2024•1 min read

The volatility in the CHF to USD rate has resurfaced. After a strong bullish trend in USD/CHF during the first four months of 2024, the pair has been in a downward trend since May. Initially, the pair gained nearly 8 cents, but in May, the US dollar declined following a series of disappointing US economic data releases, bringing the price down to lows of 0.87.

The earlier rise in USD/CHF was driven by the Swiss franc’s persistent weakness after the Swiss National Bank (SNB) implemented two consecutive rate cuts in recent meetings. However, the current market risk factors are having a greater impact, with safe havens rallying as traders seek security. The USD/CHF is now trading back to its earlier low of 0.87277 today.

USD/CHF Chart Daily – Testing Support at 0.8730

This level is a key support and resistance zone, aligning with the March 8 low of 0.8728 and a swing high from late January that held firm yesterday. Consequently, USD/CHF’s technical outlook has turned from neutral to bearish after falling below the daily Moving Average (SMA). The pair remains below the 20, 100, and 200-day SMAs, indicating ongoing selling pressure. Today we had the Swiss CPI (Consumer Price Index) report for July which was expected to show a -.02% decline, following the softening trend.

Swiss CPI Inflation Report for July

July CPI: +1.3% y/y (expected +1.3%)
June CPI: +1.3%
Core CPI for July: +1.1% y/y
June core CPI: +1.1%

Swiss Manufacturing for July

July manufacturing PMI: 43.5 (expected 43.8)
June manufacturing PMI: 43.9

Swiss manufacturing conditions continue to deteriorate, indicating some overall economic weakness. The services sector also saw a PMI below 50 in July. Here is the breakdown for the manufacturing report:

USD/CHF Live Chart

USD/CHF

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.