Today marks the second consecutive day in which USD/CHF continues its correction from the nearly three-week high located just above the 0.8100 round level. This decline is driven by the prevailing bearish sentiment toward the US dollar.
The US Dollar Index (DXY), which tracks the dollar against a basket of currencies, set a new weekly low. This occurred after Tuesday's release of US economic data, which reinforced the Federal Reserve's "dovish" outlook. Specifically, the Producer Price Index (PPI) showed signs of slowing inflation, while September retail sales rose less than expected. In addition, the Conference Board Consumer Confidence Index fell to a seven-month low due to concerns about labor market conditions, giving the Fed more room for additional monetary easing.
Meanwhile, New York Fed President John Williams stated last Friday that a possible rate cut in the near future would not jeopardize inflation targets. Earlier this week, Federal Reserve Governor Christopher Waller noted that the labor market is weak enough to justify another 0.25% rate cut at the December meeting. Then, on Tuesday, Fed Board member Stephen Miran expressed support for a dovish stance in a televised interview, emphasizing the need for significant rate reductions due to deteriorating labor market and economic conditions in order to bring monetary policy to a neutral level.
Traders reacted quickly: there is now roughly an 85% probability that the Fed will cut rates by 25 basis points in December. In contrast, the Swiss National Bank (SNB) is expected to keep its key interest rate at 0.00% for the foreseeable future, with analysts predicting no changes until 2027. This scenario strengthens expectations of further declines in USD/CHF in the short term. For better trading opportunities, attention should be paid to upcoming US economic data — specifically, jobless claims and new home sales. These releases may influence dollar dynamics.
From a technical standpoint, oscillators on the daily chart remain positive, and the pair is trading above the 100-day SMA as well as the 9- and 14-period EMAs, confirming a bullish outlook. Resistance for USD/CHF lies at the 0.8100 round level, above which prices may attempt to challenge the November high near 0.8125.
The pair has found support at the 9-day EMA; below that, the next support is at the 100-day SMA, followed by the 0.8000 round level.
The table below shows how the US dollar has performed this week relative to major currencies. Among them, the dollar showed the most strength against the Canadian dollar.
