USD/CHF Slips Near $0.79 as 4.3% US GDP Test Looms for Dollar Bulls
USD/CHF is trading around $0.7945 during the European session - it's trying to stick with recent gains, but the US dollar...
Quick overview
- USD/CHF is trading around $0.7945, reflecting uncertainty in global politics and a hesitant market ahead of a major US data release.
- Political tensions, including Trump's tariff threats, are increasing pressure on the US dollar, leading investors to seek safety in the Swiss franc.
- Recent Swiss data shows a decline in producer and import prices, reinforcing the franc's stability amid low inflation concerns.
- Market focus is on upcoming US GDP and PCE data, which could significantly impact the USD/CHF exchange rate.
USD/CHF is trading around $0.7945 during the European session – it’s trying to stick with recent gains, but the US dollar is losing ground once again . The whole situation for the pair reflects a mix of uncertainty about global politics, hesitation to commit to positions before a major US data release, and the fact that the Swiss franc is still seen as a safe place to be. When everyone’s focusing on today’s final US GDP reading of 4.3%, people are getting really selective about whether to try to grab onto momentum.
Geopolitics Revive “Sell America” Mood
The pressure on the dollar has increased significantly as new political headlines have only added to the sense of uncertainty. Donald Trump has been talking about Greenland and has also threatened more tariffs on parts of the European Union – that’s unsettled risk sentiment over there, and now Europe is talking about coming up with some countermeasures of their own, such as putting duties on US goods, which keeps investors uncertain.
All this has been pushing funds away from US assets, and even when US data is good enough to give the dollar a bit of a bounce, it’s unlikely to last long. And as a result, the Swiss franc has benefited from being a safe haven at a time when people are worried about policy and trade uncertainty.
Swiss Data Reinforces Franc Stability
On the Swiss side, the recent data is doing nothing to shake the currency. Producer and Import Prices fell by 1.8% year on year in December, a deeper decline than in November – the biggest drop in that measure since September. And monthly prices dropped by 0.2% – actually against expectations of an uptick.
Lower prices can, of course, make people a bit worried about growth, but it’s also a reminder that Switzerland has a pretty low-inflation profile, which makes people more confident in the franc. Put that together with all the demand coming in from people who think of the franc as a safe place to be, and it’s no wonder the Swiss currency is holding firm against the wobbling dollar.
US GDP and PCE in Sharp Focus
Now, markets are shifting their focus to the big US data set that’s due out today:
- Final US GDP q/q – we’re expecting 4.3%, so no change on that one.
- Unemployment Claims – we’re looking for 209K
- Core PCE m/m – the Fed’s key gauge of inflation is looking for a 0.2% rise
If there’s an unexpected turn of events in any of those numbers, then it’s easy to imagine it could send a shockwave through USD/CHF and maybe even make some of the current technical levels look a lot less secure.
USD/CHF Technical Picture Shows Cooling Momentum
From a purely technical point of view, USD/CHF is still within a fairly broad, ascending channel on the two-hour chart. It managed to bounce back from $0.7890 but couldn’t get much past $0.7980, where it ran into the 50-day EMA and a descending trendline. The recent candles are showing smaller bodies with mixed wicks, suggesting it’s hesitating now, not really going anywhere with much confidence.
The 200-day EMA at $0.7930 is acting like a bit of a safety net at the moment. And if you take a look at the Fibonacci levels, you’ll see the bounce is coming to an end near the 38.2% level, while the RSI is right on 50, so there’s no sign of any kind of strong trend developing.
Trade idea: – if you see the price bounce back below $0.7980, then take a sell of that and aim for $0.7895. If it takes off, then set a stop loss above $0.8035.
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