The USD/CHF currency pair has weakened to the 0.9025 level, ending a three-day winning streak due to fresh US Dollar (USD) selling and increasing global trade tensions. New tariff threats from the previous US President Donald Trump have created fear of a trade war, driving demand for safe-haven currencies such as the Swiss Franc (CHF). In addition, a drop in US Treasury bond yields and a risk-averse market sentiment have added to the pressure on the USD. Expectations of a hawkish Federal Reserve (Fed) outlook may, however, offer some relief to the USD, potentially capping further losses in the pair. Market participants now look forward to future US economic releases such as Weekly Initial Jobless Claims and the Philly Fed Manufacturing Index, as well as speeches of Federal Open Market Committee (FOMC) members, for new trading hints.

 KEY LOOKOUTS

• New trade war fears induced by fresh threats from Donald Trump support demand for safe-haven currencies such as the Swiss Franc (CHF) and clobber USD/CHF.

• Rebounding selling in the US Dollar, combined with falling Treasury yields, bears on USD/CHF even as a hawkish Federal Reserve tone lends some support.

• Market participants look to important US economic data releases, such as Weekly Jobless Claims and the Philly Fed Manufacturing Index, which have the potential to impact USD/CHF price action.

• Federal Reserve commentary could shed light on future monetary policy, potentially influencing market sentiment and fueling USD/CHF volatility.

USD/CHF is under pressure as increased US Dollar (USD) weakness and rising trade tensions cool investor appetite. Fresh tariff threats from former US President Donald Trump have fueled fears of an impending trade war, propelling demand for safe-haven currencies such as the Swiss Franc (CHF). Further, a drop in US Treasury bond yields has eclipsed the hawkish tone of the Federal Reserve (Fed), capping USD’s revival. But the next releases of US economic data, such as Weekly Jobless Claims and the Philly Fed Manufacturing Index, and speeches by influential FOMC members may bring new information about monetary policy and drive USD/CHF price action in the next sessions.

The USD/CHF currency pair loses ground as increased USD selling and growing trade tensions spur demand for safe-haven assets such as the Swiss Franc. Falling US Treasury yields dominate the Fed’s hawkish tone, while future US economic releases and FOMC speeches could direct additional price action.

• The pair falls to the 0.9025 region, ending a three-day winning streak in the wake of increased USD selling and escalating trade tensions.

• New tariff news drives international trade war fears, which support demand for safe-haven currencies such as the Swiss Franc (CHF).

• Weakening US Treasury bond yields and overall risk aversion hold down the US Dollar, which restricts its rally.

• In spite of dovish FOMC minutes, hopes of a prolonged rate pause can lend some support to the USD.

• Watch US Weekly Jobless Claims and the Philly Fed Manufacturing Index for indications of economic health and potential market effect.

• Remarks by Federal Reserve officials may influence expectations of monetary policy and guide USD price action.

• A drop below 0.9025 can expose the pair to more weakness, with the next important support in the 0.8970-0.8965 zone.

The USD/CHF currency pair continues to be affected by the developments in world trade and investors’ mood, especially following recent tariff threats from former US President Donald Trump. The threat of new tariffs created fears of an impending trade war, leading to investors’ appetite for safe assets such as the Swiss Franc (CHF). This change of market sentiment reflects wider economic uncertainty, as the policies of trade continue to weigh on global financial stability. Furthermore, the conservative tone in equity markets suggests investors are taking prudent stock of risks, with a special emphasis on safe-haven currencies in light of geopolitical and economic uncertainty.

USD/CHF Daily Price Chart

TradingView Prepared by ELLYANA

Meanwhile, the movement of the US Dollar is influenced by a combination of economic signals and policy expectations. Although the Federal Reserve has been hawkish, recent market developments indicate that investors are keenly interested in future releases of economic data. Important reports such as the Weekly Initial Jobless Claims and the Philly Fed Manufacturing Index are likely to reveal more about the health of the US economy. Moreover, Federal Reserve officials’ speeches can provide greater insight into monetary policy in the future, shaping market expectations and impacting overall investor sentiment.

TECHNICAL ANALYSIS

USD/CHF currency pair has been resisted at the 0.9055 level, where selling pressure was witnessed, resulting in a pullback towards the 0.9025 region. The pair’s failure to hold gains indicates a possible change in momentum, with traders closely monitoring major support levels around 0.8970-0.8965. A breakdown of this level could set the stage for additional decline, while a rebound from here might signal consolidation or fresh buying interest. To the upside, continued action over 0.9055 could enhance bullish pressure, driving the pair to the next resistance around 0.9100. Momentum oscillators like the Relative Strength Index (RSI) and Moving Averages will play a key role in establishing the next directional impulse.

FORECAST

If the USD strengthens on hawkish Federal Reserve cues or better-than-anticipated US economic news, the USD/CHF currency pair may try to bounce back. A breakout above the 0.9055 resistance level may encourage more buying interest, and the pair may head towards the 0.9100 psychological level. Any relief in global risk appetite or relaxation in trade tensions also may take away demand for the safe-haven Swiss Franc, supporting the USD. Investors will also be monitoring future FOMC speeches for interest rate direction clues, which would support the dollar and push the pair higher.

To the downside, ongoing global trade tensions and risk aversion may keep the Swiss Franc underpinned, capping any USD/CHF recovery. If the pair cannot hold above the 0.9025 area, it may see losses extend to the 0.8970-0.8965 support area. A clean breakdown below this level could initiate further selling pressure, leaving the pair vulnerable to deeper losses. Weaker US economic news or falling Treasury yields could also bear down on the dollar, adding to bearish sentiment. Any increase in geopolitical tensions or financial market uncertainty could further enhance demand for the Swiss Franc, sending USD/CHF lower.