USD/CHF. Analysis and Forecast

[Ben Graham]

Today, the USD/CHF pair came under pressure during the U.S. session. In recent months, the U.S. dollar has faced significant pressure amid market concerns related to Trump's trade policy, signs of an economic slowdown, and high inflation in the country. Unprecedented critical statements by President Donald Trump toward the Federal Reserve have also weighed on the dollar. Expectations of further easing in Fed monetary policy are limiting dollar strength.

The U.S. central bank cut rates by 25 basis points at its last two monetary policy meetings and is projecting two more cuts in 2026. In addition, Chairman Jerome Powell's term expires in May, and Trump is likely to appoint a more dovish policymaker to the position, with a decision on the candidate expected to be announced in the coming weeks. These circumstances reinforce expectations of a more aggressive monetary easing cycle.

Nevertheless, the latest U.S. macroeconomic indicators look fairly optimistic. For the first time in a long while, initial jobless claims fell by 16 thousand to 199 thousand in the week ending December 26, beating the revised figure from the previous week (215 thousand). An increase in real estate transactions has also been noted — the highest level in the past three years. Today's release of the U.S. manufacturing activity index (S&P Global Manufacturing PMI) confirmed a moderate slowdown in the sector. However, investors are awaiting the key December nonfarm payrolls report, the release of which has been postponed to next week, as it will provide a clearer picture of expectations regarding the Fed's interest rate path.

In Switzerland, the KOF Economic Barometer showed a surprising improvement, rising to 103.4 in December from 101.7 in the previous month — the highest reading in more than a year. This points to a potential strengthening of economic growth ahead. Despite the positive assessment, the KOF institute noted strong readings in the industrial and construction sectors, while also warning of signs of weakening in demand indicators.

From a technical perspective, oscillators on the daily chart are in negative territory. The 9-day EMA is below the 14-day EMA, which also confirms a bearish outlook for the USD/CHF pair. Resistance is located at the 14-day EMA around 0.7933, above which the next resistance lies at 0.7943. Solid support has been found at the round 0.7900 level.

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