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USD/CHF Slides to Three-Month Lows as Fed Rate-Cut Bets Overpower Strong US Growth
Traders' Opinions
Summary:
USD/CHF hit a three-month low near 0.7860 as strong US GDP data failed to offset growing expectations of multiple Fed rate cuts, keeping the US dollar under pressure while the Swiss Franc benefited from safe-haven demand and a firmly bearish technical setup.
Sell
TradingUSDCHF
EXP
0.78800
Entry Price
0.78300
TP
0.79100
SL
0.78891 -0.00029 -0.04%
0
Point
Flat
0.78300
TP
CLOSING
0.78800
Entry Price
0.79100
SL
The US Dollar continued to lose ground against the Swiss Franc on Wednesday, extending its decline for a third consecutive session as investors looked past surprisingly strong US economic data and instead focused on the Federal Reserve’s increasingly dovish policy outlook. The USD/CHF pair slid to a fresh three-month low near 0.7860 during European trading hours, underlining persistent selling pressure on the greenback even as the US economy shows signs of robust momentum.
At the same time, the broader US Dollar Index (DXY), which measures the currency against six major peers, hovered close to its own three-month trough around 97.75, reinforcing the narrative that the dollar’s weakness is not isolated but structural in nature. Markets appear convinced that the Fed’s next policy moves will favor growth support over inflation vigilance, a view that continues to cap any meaningful rebound in the US currency.
This downward move in the dollar comes despite data released Tuesday showing the US economy expanded at a 4.3% annualized pace in the third quarter, sharply beating expectations for a 3.3% increase and improving from the 3.8% growth recorded in the second quarter. Under normal circumstances, such a growth surprise would be expected to boost Treasury yields and provide support to the dollar. Instead, the reaction was muted, highlighting how monetary policy expectations are currently dominating market pricing.
Investors appear increasingly confident that the Fed is done tightening and will instead pivot decisively toward easing in the coming months. Last week’s policy signals from Fed officials reinforced expectations that more than one interest-rate cut could be delivered next year, particularly if inflation continues to cool while financial conditions remain tight. This has dragged US yields lower and reduced the dollar’s appeal relative to safe-haven currencies such as the Swiss Franc.
From a broader perspective, the market’s reaction suggests that strong growth alone is no longer sufficient to rescue the dollar if policymakers are perceived to be prioritizing financial stability and labor-market risks over inflation. In that sense, the latest GDP data may paradoxically strengthen the case for rate cuts, as it gives the Fed room to ease policy without immediately threatening economic momentum.
Meanwhile, the Swiss Franc has found renewed support ahead of the Christmas holiday period, a time when liquidity thins and defensive positioning often becomes more pronounced. The CHF has outperformed most of its major peers as investors remain cautious about global growth risks, geopolitical uncertainty, and the sustainability of risk-asset rallies into year-end. Switzerland’s reputation for monetary discipline and financial stability continues to make the franc a preferred refuge when confidence in the US dollar wanes.
Technical Analysis 
From a technical standpoint, the outlook for USD/CHF remains decisively bearish. The pair is trading well below its 20-day Exponential Moving Average (EMA), currently near 0.7966, with the moving average sloping lower and acting as dynamic resistance. This configuration suggests that any short-term rebounds are likely to be sold into rather than sustained.
Momentum indicators reinforce the negative bias. The 14-day Relative Strength Index (RSI) has slipped to around 31, hovering near oversold territory and confirming persistent downside pressure. While this raises the risk of a short-term technical bounce, it does not yet signal a trend reversal.
As long as USD/CHF remains below the 20-day EMA, bearish momentum is likely to persist. A daily close below the September 17 low at 0.7830 would open the door to deeper losses and potentially accelerate downside moves as stop-loss orders are triggered. Conversely, any recovery attempt would need to reclaim the 0.7960–0.8000 zone to meaningfully challenge the current bearish structure.
TRADE RECOMMENDATION
SELL USDCHF
ENTRY PRICE: 0.7880
STOP LOSS: 0.7910
TAKE PROFIT: 0.7830
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