USD/CHF Slips Below 0.79 as Fed Uncertainty Builds Bearish Pressure
USD/CHF is trading just above 0.7900, attempting to stabilize after a multi-day decline driven by broad US dollar weakness...
Quick overview
- USD/CHF is attempting to stabilize above 0.7900 after a decline influenced by US dollar weakness.
- Political developments, including a framework agreement on Greenland, have reduced safe-haven demand for the dollar.
- Technical indicators suggest a bearish outlook for USD/CHF, with key resistance levels identified between 0.7955 and 0.7965.
- Traders remain cautious as upcoming US data and Federal Reserve communications could impact dollar sentiment.
USD/CHF is trading just above 0.7900, attempting to stabilize after a multi-day decline driven by broad US dollar weakness. The move comes as the US Dollar Index (DXY) hovers near a two-week low around 98.26, reflecting softer demand for the greenback amid political and policy uncertainty.
Earlier in the week, the dollar briefly found support after US President Donald Trump and NATO Secretary General Mark Rutte reached a framework agreement on Greenland, easing geopolitical risks. Trump also rolled back 10% tariffs on several EU countries and ruled out any military action related to the Arctic territory. These developments reduced safe-haven flows into the dollar, limiting its rebound.
Markets remain cautious as Trump prepares to announce Jerome Powell’s successor at the Federal Reserve, raising questions about future monetary policy direction. Investors are wary that a more politically aligned Fed leadership could reshape rate expectations, keeping the dollar under pressure.
Despite the weaker dollar backdrop, USD/CHF has avoided sharper losses due to mild Swiss franc softness, creating a narrow, hesitant recovery rather than a clear reversal.
USD/CHF Chart Signals Bearish Control
From a technical perspective, the 4-hour chart continues to favor sellers. USD/CHF recently rejected the 0.8035 high and has since broken below a descending trendline, confirming a bearish shift rather than a temporary pullback.
Price remains capped beneath the 50-EMA and 100-EMA, clustered between 0.7955 and 0.7965, which now act as dynamic resistance. Recent candlesticks near this zone show small bodies and upper wicks, a sign that buying momentum fades quickly on rebounds.
Key downside levels are becoming more relevant:
- 0.7887 acts as near-term support, tested multiple times
- A break below opens 0.7862, followed by 0.7837, the broader range floor
On the upside, bulls would need a clear reclaim above 0.7965 to ease bearish pressure and reopen 0.7999.
Momentum Remains Soft as Traders Wait
Momentum indicators reinforce the cautious tone. RSI is holding near 40, stabilizing after dipping into oversold territory. This suggests consolidation rather than a strong trend reversal, keeping the focus on downside risks unless price structure improves.
With US data releases and Fed communication ahead, USD/CHF is likely to remain sensitive to shifts in rate expectations and broader dollar sentiment.
USD/CHF Trade Setup to Watch
- Bias: Bearish below resistance
- Sell near: 0.7955
- Target: 0.7885
- Stop: Above 0.7990
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