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Bearish Momentum Could Persist as USDCHF Faces Strong Resistance
Central Bank
Economic
Summary:
This zone now acts as a key local resistance, which could trigger renewed downside pressure.
Sell
PENDINGUSDCHF
EXP
0.80100
Entry Price
0.79200
TP
0.80450
SL
0.79633 +0.00004 +0.01%
--
Point
PENDING
0.79200
TP
CLOSING
0.80100
Entry Price
0.80450
SL
A softer-than-expected U.S. Producer Price Index (PPI) reading may place further downward pressure on the U.S. Dollar. Data released by the Bureau of Labor Statistics (BLS) on Wednesday showed that annual PPI inflation eased to 2.6% in August, down sharply from 3.3% in July and well below the market consensus of 3.3%. On a monthly basis, producer prices slipped 0.1%, contrasting with the 0.7% increase recorded in July (revised from 0.9%).
Looking ahead, the U.S. Consumer Price Index (CPI) for August is projected to accelerate to 2.9% year-on-year from 2.7%, while the core CPI—which excludes food and energy—is expected to hold steady at 3.1%. Meanwhile, Fitch Ratings anticipates two rate cuts of 25 basis points each in September and December, followed by three additional reductions in 2026.
The BLS also revised its annual benchmark payroll figures sharply lower, reporting a decline of -911K jobs as of March 2025, a steeper drop than the -682K projected by economists. This revision has reinforced the case for the Federal Reserve to deliver a rate cut at next week’s meeting. Still, the decision could hinge on the upcoming inflation releases—if PPI or CPI readings surprise to the upside, the Fed may hesitate to act.
On the geopolitical front, U.S. President Donald Trump has urged the European Union to impose 100% tariffs on Chinese and Indian goods as a way to increase pressure on Russian President Vladimir Putin, according to the Financial Times. Washington further noted that the Trump administration is prepared to “mirror” any measures introduced by the EU, suggesting that the U.S. could raise tariffs on Chinese and Indian imports to the same extent.
In Switzerland, Swiss National Bank (SNB) President Martin Schlegel commented in a speech in Vezia that the central bank would “not hesitate” to cut rates again should conditions warrant, but stressed that the threshold for returning to negative rates remains very high, given the heavy burden such policies place on savers and pension funds. He also announced a new step toward transparency: beginning with the September 25 meeting, the SNB will publish policy discussion summaries four weeks after each decision. His remarks reinforced the view that the SNB is comfortable with the current strength of the Swiss franc and is not in a rush to ease aggressively, especially with Swiss inflation still subdued.
Technical Analysis
USD/CHF recently extended its bearish momentum, testing support at 0.7922 before staging a modest rebound toward the 0.8000 area. This zone now acts as a key local resistance, which could trigger renewed downside pressure. Notably, the RSI has been rising faster than price, approaching levels where a bearish divergence could form. Should the RSI surpass its previous peak without a corresponding breakout in price, it would likely be interpreted as a sign that bullish momentum is fading and sellers may soon regain control.
In addition, the 100- and 200-period moving averages on the 4-hour chart, currently located at 0.8023 and 0.8047, sit close to the descending trendline that has capped recent rallies. These levels will be crucial to watch—if USD/CHF climbs into the 0.8020–0.8050 zone, it could offer an attractive setup for renewed downside positions. Conversely, a clear break above the trendline would invalidate the bearish setup and open the door for additional gains.
Trading Recommendations
Trading direction: Sell
Entry price: 0.8010
Target price: 0.7920
Stop loss: 0.8045
Validity: Sep 19, 2025 15:00:00
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