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Swiss Franc Pushes USD/CHF Toward 0.8000 as Fed Turmoil and Safe-Haven Demand Weigh on Dollar
Traders' Opinions
Summary:
The Swiss Franc extended its rally to a fourth straight day on Friday, with USD/CHF sliding toward the 0.8000 handle as traders bet on a September Fed rate cut despite sticky US inflation.
Sell
TradingUSDCHF
EXP
0.79965
Entry Price
0.79000
TP
0.81030
SL
0.79978 -0.00130 -0.16%
0
Point
Flat
0.79000
TP
CLOSING
0.79965
Entry Price
0.81030
SL
The Swiss Franc strengthened for a fourth consecutive session on Friday, pushing the USD/CHF exchange rate closer to the psychologically significant 0.8000 mark as investors increasingly price in a September interest rate cut from the Federal Reserve and seek shelter amid growing political and policy uncertainty in Washington.
In late New York trade, USD/CHF was hovering around 0.7997, retreating from early intraday gains and marking fresh one-month lows. The pair’s decline closely mirrored the US Dollar Index (DXY), which slipped back below 98.00 to 97.76, underscoring a broader softening in the Greenback’s momentum.
The move comes despite US data that—at first glance—suggested economic resilience. The Bureau of Economic Analysis reported that the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, rose 0.3% month-on-month in July, matching consensus forecasts. On an annual basis, core PCE accelerated to 2.9%, its highest level since February, from 2.8% in June. Headline inflation was more subdued, holding at 2.6% year-on-year with a modest 0.2% monthly increase.
Household demand appeared equally firm, with personal spending rising 0.5% in July, up from 0.3% in June, while personal income increased 0.4% month-on-month. Taken together, the data painted a picture of sticky inflation accompanied by robust consumer activity—a mix that in another market environment might have lifted the Dollar on expectations of a more hawkish Fed.
Yet traders largely ignored the stronger demand backdrop, focusing instead on the policy outlook. Fed funds futures are now pricing an 89% probability of a 25 basis-point cut at the September FOMC meeting, cementing expectations that the central bank will move toward easing after holding rates steady since May. Yields on the front end of the Treasury curve slipped as investors positioned for a policy shift, though longer-dated yields were steadier, reflecting confidence that long-run inflation risks remain contained.
Adding to the Dollar’s vulnerability was intensifying political tension surrounding the independence of the Fed. The legal dispute between President Donald Trump and Fed Governor Lisa Cook escalated this week, with Cook filing an emergency motion to block her removal after Trump attempted to oust her. The Fed submitted its own brief in the case Friday, while the Justice Department signaled it would not oppose converting Cook’s request into a preliminary injunction. Legal experts note that the battle hinges on the interpretation of “for cause” under the Federal Reserve Act, a term traditionally associated with misconduct but now potentially subject to broader interpretation. Market observers warn the case could ultimately find its way to the Supreme Court, raising fresh uncertainty about the Fed’s autonomy.
Against this backdrop, the Swiss Franc has been a prime beneficiary. Long regarded as a safe-haven currency, the Franc’s appeal has been reinforced by both macroeconomic and political risks that undermine the Greenback. Ongoing trade frictions, questions about US institutional stability, and the dovish recalibration of Fed expectations have driven investors toward the security of the Swissie.
Technical Analysis
From a technical perspective, USD/CHF remains under pronounced bearish pressure, with the pair breaking through key support at 0.8020. The move places the pair firmly below the 50-day Exponential Moving Average (EMA50), reinforcing the dominance of the corrective downtrend on the short-term charts. The broader bearish structure remains intact, with the pair trending alongside a supportive channel that favors additional downside.
However, momentum indicators suggest near-term caution for bears. The Relative Strength Index (RSI) has entered oversold territory, flashing early positive signals that could prompt a temporary pause or modest rebound in losses.
Still, technical setups highlight further downside risk. The current sell entry is pegged at 0.8030, aligning with a pullback resistance and the 38.2% Fibonacci retracement. A stop loss is recommended near 0.8100, coinciding with a swing high and the 127.2% Fibonacci extension. On the downside, the take-profit target lies at 0.7900, which aligns with a Fibonacci extension support zone around 161.8%.
TRADE RECOMMENDATION
SELL USDCHF
ENTRY PRICE: 0.8000
STOP LOSS: 0.8100
TAKE PROFIT: 0.7900
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