USD/CHF traded near 0.7720 on Wednesday and stayed in a daily downtrend. The pair remained below the 50-day EMA at 0.7868 and the 200-day EMA at 0.8120. It bounced from 0.7605 in late January, then fell from a January swing high near 0.8040.
US January NFP rose by 130K, beating the 70K consensus and December’s revised 48K. However, BLS benchmark revisions cut total 2025 nonfarm employment by 898K and lowered average monthly job growth from 49K to 15K. Unemployment slipped to 4.3% from 4.4%, and hourly earnings rose 0.4% month-on-month versus a 0.3% forecast.
Fed Cut Timing Shifts
This data pushed expected Fed rate cuts from spring toward July. On lower timeframes, the Stochastic Oscillator (14,5,5) rose from oversold levels, but USD/CHF stayed below 0.7750. A break above 0.7800 would bring the 0.7868 EMA into focus.
If price drops below 0.7650, attention shifts back to 0.7605 and then 0.7500. A speech by Fed Governor Schmid had a hawkish 7.0 rating, and Governor Bowman is due to speak later.
The US dollar jumped briefly after the January jobs report showed a headline gain of 130,000, far above expectations. Even so, this strength in USD/CHF likely reflects a short-term reaction. We view it as a chance to sell into the existing downtrend.
The more important development is the revised job data for 2025, which suggests the US economy was much weaker than previously reported. Average monthly job growth in 2025 was only 15,000, down sharply from the earlier estimate of 49,000. This weakness suggests the dollar’s strength may fade.
Although markets have pushed expectations for a Fed rate cut from spring to July, softer fundamentals make it harder for the Fed to stay hawkish. The CME FedWatch Tool now shows a 65% chance of a rate cut by the July meeting. We expect this probability to rise as markets absorb the weak 2025 employment revisions.
Swiss Franc Policy Divergence
Meanwhile, the Swiss economy looks steady. Recent data shows inflation at 1.7%, well within the Swiss National Bank’s target range. This gives the SNB little reason to cut rates, creating a policy gap that supports a stronger Swiss franc. The franc’s safe-haven appeal could also attract inflows if US slowdown fears grow.
Over the next few weeks, it may make sense to use any temporary USD/CHF strength to build bearish exposure. One approach is to sell call options with a strike near 0.7800, which reflects a view that rallies will stall below key resistance. This strategy can profit if the pair falls or trades sideways.
On the downside, a break below 0.7650 support would raise the odds of a retest of the year’s low near 0.7605. Buying put options with a 0.7650 strike could be a way to position for a renewed downtrend. In the past, large downward revisions to US labor data—like those seen in 2019—have often been followed by dollar underperformance over the next two quarters.
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