The USD/CHF currency pair is experiencing continued selling pressure for the second consecutive day on Friday, continuing its drop from the 0.8400 level, which was the highest it’s been since May 2025. This downward movement sees prices slipping beneath the mid-0.8200s, marking a two-week low during the first half of the European trading session, largely due to a generally weaker US Dollar (USD).
Even with rising inflation in the US, it appears that many investors believe the Federal Reserve (Fed) won’t change interest rates at their upcoming policy meeting later this month. This sentiment was reinforced by neutral comments from Fed Chair Kevin Warsh earlier today, alongside a notable decline in US bond yields, which has pulled the USD down to its lowest point in a week and a half, further impacting the USD/CHF pair.
That said, market players are still pricing in a better than 90% chance that the central bank will hike rates at its December meeting due to ongoing inflation concerns, primarily linked to fluctuating energy prices. Additionally, persisting geopolitical tensions—particularly in the Middle East and the standoff between the US and Iran over the Strait of Hormuz—might act as a buffer against significant losses for the USD, lending some support to the USD/CHF pair.
From a technical standpoint, repeated failures to break through the 0.8400 barrier and the ensuing market adjustment caution bullish traders. Nonetheless, current prices remain slightly above the 200-period Simple Moving Average (SMA) on the 4-hour chart, situated at 0.8235, which could provide initial support. Meanwhile, the 38.2% Fibonacci retracement level at 0.8230 might become a critical point for the USD/CHF pair.
Looking at momentum indicators, they still signal weakness; the Relative Strength Index (RSI) lies around 34, and the Moving Average Convergence Divergence (MACD) is below zero with a negative histogram. This indicates that selling pressure dominates, despite the nearby moving average support, though a sustained breach below the 0.8235-0.8230 range is necessary to reinforce the case for further declines.
Should the USD/CHF pair continue to drop, it might find a structural support level around the 38.2% Fibonacci retracement near 0.8223, where buyers could intervene to stall the decline. On the upside, a rally would require overcoming the 23.6% retracement level at 0.8289 to relieve some bearish pressure and potentially trigger a more significant corrective upturn.
