FX.co ★ Der | USD/CHF

The USD/CHF pair experienced a period of upward consolidation on Tuesday, halting its recent decline and rising by more than 0.51%. Despite a weaker US dollar following the release of a significant downward revision to nonfarm payrolls (NFP) data, the Swiss franc failed to gain traction, which allowed the pair to recover from its lows. The pair started the Asian session around 0.7971, but a wave of buying pushed it as high as 0.7970, a nearly 70-point rally. The US dollars recovery was a surprising development given the fundamentally bearish news. The preliminary annual benchmark revision to US NFP data indicated that the US economy added a staggering 911,000 fewer jobs than previously reported, highlighting a faster-than-expected slowdown in the labor market. This data has cemented market expectations of a Federal Reserve rate cut at its September meeting. However, the market had already built up a significant short position on the dollar, and the release of the negative jobs data prompted a wave of short-covering, which temporarily boosted the greenback. The Swiss francs failure to capitalize on the dollars weakness can be attributed to several factors. As a traditional safe-haven currency, the franc tends to strengthen during times of global market uncertainty. However, market sentiment has been generally upbeat, which has reduced demand for safe-haven assets. Furthermore, the Swiss National Bank (SNB) has been in an easing cycle, and there are growing expectations of further rate cuts to combat a strong franc and weak inflation. This policy divergence—with the SNB easing and the Fed now expected to join—is a key factor that is limiting the Swiss francs gains. From a technical perspective, the USD/CHF pairs rally is not yet confirmed as a reversal of its downtrend. The Relative Strength Index (RSI) continues to indicate bearish momentum. However, if the pair can decisively break above the September 8 high of 0.7995, it could signal a change in momentum and attract more buyers. A break above 0.8000 would be a significant technical development, as it would increase the likelihood of a move toward the confluence of the 50-day and 20-day moving averages at 0.8022 and 0.8029, respectively. If the pair can break above these key moving averages, the next resistance levels would be 0.8100, followed by the 100-day moving average at 0.8115. Conversely, if the pair fails to hold its current gains and declines below 0.7900, it would signal a resumption of the downtrend. The next support level would be the July 1 swing low of 0.7872. A break below this level would open the door for a more significant decline toward the yearly lows. The pairs near-term direction will depend on whether the US dollar can sustain its recent short-covering rally and whether the Swiss franc can regain its safe-haven appeal in the face of political and economic uncertainties.