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Greenback Slumps Below 0.81 vs CHF as Traders Bet on Fed Easing and Flee Risk
Economic
Summary:
The USD/CHF pair crashed to levels not seen since January 2015 on Monday, weighed down by heightened fears of a U.S. recession, dovish Federal Reserve rate expectations, and renewed global trade uncertainty.
Sell
CLOSEDUSDCHF
End Time
0.80900
Entry Price
0.78000
TP
0.82300
SL
0.83027 -0.00122 -0.15%
1400
Points
Loss
0.78000
TP
0.82301
CLOSING
0.80900
Entry Price
0.82300
SL
The U.S. Dollar opened the week under heavy pressure, as the USD/CHF pair tumbled to its lowest level in over a decade, sliding below the mid-0.8000s in the first half of Monday’s European session. The decline marks a significant technical and psychological breakdown for the pair, sending a clear signal that bearish momentum has taken firm control. What began as a quiet consolidation over the past week quickly erupted into a sharp sell-off, as the pair crashed through critical support levels, solidifying the view that the path of least resistance is now firmly to the downside.
At the heart of the move lies a confluence of fundamental drivers. Global markets remain rattled by trade-related uncertainty, with investors growing increasingly wary of the long-term implications of U.S. President Donald Trump’s erratic trade policy maneuvers. The president’s unpredictable announcements, including tit-for-tat tariff threats and escalating rhetoric, have reignited fears of a full-blown global trade war. These concerns are having a pronounced impact on investor sentiment, as equity markets across major regions display a cautious, risk-averse tone.
As risk appetite continues to wane, the Swiss Franc is once again emerging as a preferred destination for capital seeking shelter from volatility. The Franc’s reputation as a stable, reliable safe-haven asset has only grown stronger in this environment, attracting inflows from both institutional and retail investors alike. The CHF’s rally has been further bolstered by its relative insulation from the chaos affecting other G10 currencies, positioning it as a prime beneficiary of market defensiveness.
Compounding the pressure on USD/CHF is the mounting concern over the trajectory of the U.S. economy. Analysts and investors alike are increasingly pricing in the likelihood of a recession as soft economic data continues to roll in. The combination of a cooling labor market, tepid consumer demand, and slowing industrial output has cast a long shadow over America’s near-term outlook. In this fragile context, markets are bracing for a return to policy easing from the Federal Reserve.
Market expectations for Federal Reserve policy have shifted dramatically in recent weeks. Despite Fed Chair Jerome Powell’s hawkish remarks last week—where he suggested that the central bank remains in a position to hold rates steady pending greater clarity—investors are betting otherwise. Futures markets are now fully pricing in the possibility of at least 100 basis points of rate cuts through 2025, a sharp contrast to the Fed’s stated patience. The U.S. Dollar Index (DXY), which tracks the greenback against a basket of major currencies, has slumped to its lowest reading since April 2022 as a result, reflecting broad-based bearish sentiment toward the dollar.
This macroeconomic backdrop has created fertile ground for a technical breakdown in USD/CHF, and the charts are now confirming what the fundamentals have been suggesting for weeks. The pair had been coiling within a bearish triangle pattern, repeatedly posting lower highs while clinging to a key support level near 0.8098. Monday’s move finally breached that base decisively, as a surge in bearish volume overwhelmed buyers and drove the pair into fresh multi-year lows.
Technical Analysis
Technically, the picture is unequivocally bearish. USD/CHF has remained below the 200-period exponential moving average, underscoring the strength of the downtrend. The most recent attempt to break through the falling resistance line of the triangle was swiftly rejected near the 34 EMA band, which served as a cap on bullish momentum. That rejection triggered a sharp influx of sell orders, driving prices lower in a high-volume move. At the same time, the Relative Strength Index (RSI) has remained firmly below 50 during the entirety of the consolidation, offering a steady confirmation of underlying bearish pressure.
As the pair plunged through the former support at 0.8098 now converted into resistance—it printed a new low of 0.8068, confirming a fresh lower low in the ongoing downtrend. The technical implication is clear: what was once a floor has now become a ceiling, and traders are increasingly looking for confirmation of a "break and retest" setup to capitalize on further declines. A potential retest of the 0.8098 to 0.8114 zone in the coming sessions could provide short sellers with another entry point, provided the bearish momentum remains intact.
TRADE RECOMMENDATION
SELL USDCHF
ENTRY PRICE: 0.8090
STOP LOSS: 0.8230
TAKE PROFIT: 0.7800
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