The USDCHF pair has experienced fluctuations around important moving averages due to recent economic news. At first, the pair rose above the 200-hour moving average of 0.8001, coinciding with a drop in EURUSD after the ECB’s policy announcement. However, a surprising increase in U.S. jobless claims to 263K—much higher than the expected 235K—changed the momentum. As a result, the USDCHF retreated to the 100-hour moving average at 0.7967. Buyers tried to support the pair here, causing a slight rebound to about 0.7973.

Short Term Outlook

The short-term outlook for the pair now leans slightly downward, especially after it couldn’t stay above the 200-hour moving average and fell below an important retracement level. The 100-hour moving average at 0.7967 remains crucial for buyers as they work to prevent further declines. On the policy side, the Swiss National Bank is cautious about further rate cuts, keeping interest rates at zero. Meanwhile, the Federal Reserve is expected to start cutting rates in September. These factors, along with the technical levels, continue to impact the pair’s movement. The recent rise in U.S. initial jobless claims to 263,000 is a strong indicator for us. This isn’t just a one-time figure; it lifts the four-week moving average to its highest level this year, indicating a clear weakening in the U.S. labor market. This data strengthens the belief that the U.S. economy is slowing down as we approach the final quarter of 2025. With this weakening data, the market now sees an 85% chance of a Federal Reserve rate cut at next week’s meeting. This anticipated easing cycle is likely to be bearish for the U.S. dollar. It seems that the dollar’s path of least resistance is downward against currencies with less accommodating central banks.

Technical Picture

On the other side, the Swiss National Bank appears hesitant to ease policy further, having already set rates to zero earlier this year. This difference in monetary policy—where the Fed is cutting rates while the SNB remains steady—should continue to benefit the Swiss franc. The smaller interest rate gap makes holding dollars less attractive compared to holding francs. The technical aspects are now aligning with these fundamentals, as the USDCHF has failed to maintain a position above the 200-hour moving average. We are closely watching the 100-hour MA at 0.7967 as a critical short-term level. A sustained drop below this support would confirm that sellers are in control and could lead to a much larger decline. For derivative traders, this situation suggests considering bearish strategies in the coming weeks. Buying put options on USDCHF could be a straightforward way to position for a fall below the vital 0.7967 level. We might also explore put spreads to define risk, especially with volatility likely increasing around the upcoming Fed decision. This scenario reminds us of earlier times, like late 2023, when expectations of a Fed policy shift led to ongoing dollar weakness. History shows that once a Fed easing cycle starts amid slowing growth, the trend can last for several months. Therefore, any small rebounds in the pair could be seen as chances to establish or add to bearish positions. Create your live VT Markets account and start trading now.

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