FX.co ★ USD/CHF. Analysis and Forecast

The USD/CHF pair is attracting new sellers today, showing signs of weakness under current economic conditions, driven by several key factors.

Weak U.S. Dollar: The U.S. Dollar Index, which tracks the greenback against a basket of currencies, is trading at levels last seen in April 2022, reflecting declining confidence in the U.S. economy. Expectations that the Federal Reserve will soon resume its rate-cutting cycle—potentially reducing borrowing costs by 100 basis points in 2025—are further undermining the dollar's appeal.

Fed Chair Jerome Powell is expected to deliver important signals about the future direction of monetary policy during his upcoming speech.

Trade Policy Uncertainty: Despite the temporary suspension of reciprocal tariffs, uncertainty surrounding the U.S.–China trade war continues to weigh on the markets. The rapidly shifting stance of former President Trump adds to the unpredictability, putting pressure on investor sentiment. All of this benefits the Swiss franc, increasing its appeal as a safe-haven asset.

This fundamental backdrop suggests that the path of least resistance remains to the downside, supporting the continuation of the three-month bearish trend.

From a technical standpoint, oscillators on the daily chart are in oversold territory, indicating that a period of consolidation or correction may be needed before the downtrend resumes. A technical rebound could push the pair toward the 0.8270 level. A break above this resistance may trigger a short-covering rally, potentially driving the pair toward the psychological level of 0.8400.

For more favorable trading opportunities, it would be prudent to await Fed Chair Powell's remarks later today during the U.S. session, which could clarify the outlook for interest rate cuts. Additionally, U.S. retail sales data will likely impact the dollar and the USD/CHF pair. Strong figures may support the greenback, while weaker data could accelerate its decline.