USDCHF is consolidating in a narrow range between 0.8170 and 0.80222 this month. It hits an intraday low of 0.80478 and is currently trading around 0.80591.
Though surprised, U.S. taxes of 39% on Swiss exports damaged already stressed exporters, the franc proved rather strong, falling 0.2% vs. the dollar on announcement day and finishing the week about 0.8% weaker versus the euro after previous safe-haven-driven gains of up to 9%. With 12-month volatility reaching a multi-year high of 22%, the tariff shock dropped Swiss stocks downward before a cautious recovery on expectations of talks, leaving the SNB walking a thin wire: it must limit too high franc strength to safeguard export margins without upsetting U.S. accusations of currency manipulation. Most experts anticipate modest franc depreciation ahead since exporters are experiencing a "double blow" that could cut as much as 0.6% off GDP in 2025, while investors are counseled to hedge U.S.-exposed Swiss assets and watch for diplomatic breakthroughs that might reverse the franc's direction.
Technical Analysis Points to Further Downside
The pair is trading below the 55-EMA, 200 EMA, and 365 EMA on the 4-hour chart, indicating a bearish trend. The immediate resistance is at 0.8100, a break above targets 0.8135/0.8170/0.8215/0.8250.
Support Levels and Potential Declines
On the downside, near-term support is around 0.8020; any violation below will drag the pair to 0.7980/0.7920/0.7860/0.7800.
Indicators (4-hour chart)
CCI (50) - Bearish
Directional Movement Index - Neutral
Trading Strategy Recommendation
It is good to sell on rallies around 0.8078-80 with a stop-loss at 0.81350 for a TP of 0.7860.
