USD/CHF Extends Slide as Fed Uncertainty Pressures Dollar Ahead of Key US Data

Summary:

USD/CHF weakens as political uncertainty and rising expectations of Fed easing pressure the US Dollar, while mixed Swiss inflation reinforces a steady SNB outlook.

Sell USDCHF

End Time

CLOSED

0.80000

ENTRY

0.79500

TGT

0.80260

0.80354 +0.00414 +0.52%

260

Points

Loss

0.79500

TGT

0.80261

CLOSING

0.80000

ENTRY

0.80260

The USD/CHF pair extended its cautious decline on Wednesday, stabilizing slightly above the 0.8000 threshold but maintaining a heavy tone as it traded near 0.8010, down 0.25% on the day. The move reflects growing pressure on the US Dollar, which continues to underperform across major currencies as political uncertainty deepens and expectations of Federal Reserve easing accelerate. The US Dollar Index drifted to around 99.10, losing another 0.15% and edging closer to key multi-month lows, a sign that bearish momentum remains firmly in place.

Market sentiment was jolted this week after US President Donald Trump hinted that White House Economic Adviser Kevin Hassett could be named as the next Federal Reserve Chair when Jerome Powell’s term expires in early 2026. Financial markets interpreted the statement as a clear signal that the administration may push for a more dovish policy direction. Hassett is widely viewed as supportive of lower interest rates, and the possibility of a more accommodative Fed over the coming years has contributed to a softening outlook for the Dollar.

At the same time, traders continue to navigate an uncertain US macroeconomic backdrop. Attention now turns to the release of November’s ADP Employment Change report, which is expected to show a significant drop in private-sector job creation, falling to only 5,000 positions from October’s 42,000. The cooling labor trend will be further tested by the ISM Services PMI reading, forecast to decline modestly to 52.1 from 52.4. Both indicators carry added weight due to the postponement of the official Nonfarm Payrolls report, which has been delayed until December 16 because of the government shutdown. The absence of the NFP report has forced investors to rely more heavily on secondary labor indicators to gauge the health of the economy.

Commentary from Federal Open Market Committee members has further reinforced expectations that the US economy is losing momentum. Several policymakers have hinted that labor demand may be weakening faster than previously expected, and many have signaled a willingness to support additional monetary easing if required. Market pricing now reflects an 85 percent chance of a 25-basis-point rate cut next week, according to CME’s FedWatch tool. For traders, the combination of softer data, political noise, and a potentially more dovish central bank has created a challenging environment for the Dollar to recover.

Across the Atlantic, Switzerland’s economic data offered its own mixture of stability and caution. The Swiss Consumer Price Index fell by 0.2 percent month-on-month in November, matching expectations and reversing the previous month’s sharper decline. However, the annual inflation rate slipped to zero percent, undershooting the consensus forecast and underscoring Switzerland’s uniquely low-inflation environment. This subdued pricing outlook strengthens expectations that the Swiss National Bank will leave its policy rate unchanged at its upcoming meeting. SNB Chair Martin Schlegel recently noted that the threshold for returning to negative interest rates remains high, but he also emphasized the central bank’s readiness to act if conditions deteriorate. Meanwhile, SNB Board Member Petra Tschudin said inflation may rise modestly over the coming quarters, though the overall trajectory remains comfortably contained.

Technical Analysis

From a technical perspective, USD/CHF maintains a bearish posture that continues to be reinforced by market structure. The pair remains confined within a downward corrective channel that has repeatedly limited attempts at upward recovery. Price action is firmly below the 50-period simple moving average, which continues to act as dynamic resistance and confirms the bearish bias. Momentum indicators such as the Relative Strength Index remain in negative territory and have failed to generate meaningful bullish divergence, even after touching oversold levels. The pair’s inability to break above the descending trendline or re-enter the Ichimoku cloud highlights persistent selling pressure and affirms that rallies continue to be met with supply.

The recent rejection from the pullback region around 0.8026 confirms the resilience of short-term resistance, while the broader market landscape suggests limited appetite for a sustained recovery as long as Fed policy expectations lean dovish and macro uncertainty remains elevated. The next meaningful downside area sits near the 0.7950 region, roughly aligned with the 61.8 percent Fibonacci retracement, where some traders expect the pair to encounter initial support.

TRADE RECOMMENDATION

SELL USDCHF

ENTRY PRICE: 0.8000

STOP LOSS: 0.8026

TAKE PROFIT: 0.7950

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Warren Takunda

Analysts

Warren Takunda, a seasoned finance leader specializing in the Middle East, is a trusted senior analyst with a proven track record. As head of the finance team, he excels in financial planning, analysis, and reporting. Warren's expertise in financial modeling and investment analysis delivers valuable insights to clients.

Rank

Articless

1910

Win Rate

63.73%

P/L Ratio

0.72

Focus on

XAUUSD, EURUSD, GBPUSD

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