FX.co ★ USD/CHF

**USDCHF seeks to recover after sharp sell-off, but headwinds remain** The USDCHF pair rallied slightly today, crossing the 0.8148 level after falling to a 14-year low of 0.8098 on the last trading day. Despite this gradual recovery, the currency pair remains deeply entrenched in a general downtrend due to major global macroeconomic and geopolitical events. The recent 8% decline in the USD/CHF pair is mainly due to escalating trade tensions, especially the imposition of tariffs by the US and its trading partners on each other at the behest of President Trump. **The dollar is under increasing pressure, and safe-haven assets prevail** Investors flocked to safe-haven assets as uncertainty over tariffs increased. The Swiss franc benefited greatly from this change in sentiment. The Swiss National Bank pursued an extremely loose monetary policy, cutting interest rates to historic lows, while putting significant pressure on the Swiss franc to levels that contradicted current economic logic. These trends indicate the currency’s perceived safety at a time of heightened geopolitical tensions and suggest that political instability alone is not enough to ward off the growing risk facing the franc globally. Meanwhile, the US dollar has held firm amid concerns over a trade dispute that has weighed on investor confidence. The sharp decline in the US dollar against the Swiss franc since the announcement of the retaliatory tariffs not only indicates market frustration with the dollar but also reflects an overall reduction in US-linked assets as part of the current trade strategy. **Momentum indicators reflect continued downward pressure** From a technical analysis perspective, momentum indicators still paint a pessimistic picture. The Average Directional Movement Index (ADX) is pointing up and the USDCHF pair is currently showing its strongest downward momentum since the uptrend from December 2023 to April 2024. The Relative Strength Index (RSI) is near levels not seen since August 2024, supporting the view that negative pressure remains. However, the RSI’s position indicates that the market is approaching the oversold zone, which could soon lead to a correction. Similarly, the Stochastic Oscillator has remained firmly in the bearish zone for the past several sessions, indicating a possible reversal of a strong trend. Notably, the Stochastic indicator has begun testing its moving average from below. **Identifies key support and resistance levels** Meanwhile, the downside will attempt to maintain pressure below the key level of 0.8209, the low of January 16, 2015. Any decline will trigger selling, paving the way for the 0.7862, 161.8% Fibonacci extension level from September 6, 2024 to January 13, 2025. On the other hand, if the bulls manage to respond, their first primary target will be in the range of .8332-.8373. Defined as the swings of December 28, 2023 and September 6, 2024, this area will act as a major resistance zone in its attempt to rise. A successful break of this level would likely draw attention to the strong 0.8550-0.8570 range, which includes the lows of October 27, 2011, and July 27, 2023, as well as the 78.6% Fibonacci extension. A recovery to the region would represent solid progress, but would likely require a significant reduction in global tensions and/or a change in US monetary policy. **Forecast: Situation under control, but recovery seems inevitable** In short, the USDCHF currency pair is under strong downward pressure due to the global trade conflict and general risk aversion in the markets. Today's gradual recovery has provided some temporary relief, but technical and fundamental conditions are favorable for a bearish trend. Momentum indicators remain mostly negative, and all growth efforts are moving towards a slowdown.