The Swiss franc is under pressure, is USD/CHF aiming for the 0.8170 mark?
2025-08-05 16:58:47
During the European trading session on Tuesday (August 5), the USD/CHF exchange rate rose for the second consecutive day, trading around 0.8110. The dollar's rebound is closely tied to the upcoming release of the US ISM Purchasing Managers' Index. Furthermore, the unexpected resignation of Federal Reserve Board member Kugler has sparked market concerns about the Fed's independence, providing safe-haven support for the dollar. Meanwhile, the Swiss franc is under pressure due to continued concerns about exports stemming from the new round of US tariffs.
The sudden resignation of Kugler, a member of the US Federal Reserve Board, on Monday has intensified market speculation about the Fed's future policy direction. Since US President Trump may have an early opportunity to adjust the Fed's composition, the market expects him to nominate a candidate who advocates for looser policies, which will bring temporary buying to the US dollar.
Furthermore, while the Federal Reserve is expected to cut interest rates in September, San Francisco Fed President Mary Daly's remarks, emphasizing the need to "make decisions based on probabilities, rather than waiting for inflation to fully subside," suggest significant uncertainty about the policy path. This ambiguity is keeping short-term interest rate expectations flexible, contributing to the dollar's strength.
Meanwhile, the Swiss franc's pressure was directly triggered by the US announcement of a 39% tariff on Swiss goods (previously 31%), effective August 7th. Switzerland's economy is highly export-dependent, and this tariff adjustment is likely to exacerbate domestic deflationary pressures. Although annual inflation edged up to 0.2% in July, it remains below normal. Market bets on further easing by the Swiss National Bank (SNB) have intensified, leading to the Swiss franc's concessions to the US dollar.
The daily candlestick chart shows that the USD/CHF exchange rate has gradually rebounded after hitting a low of 0.7871. The current price is above the middle Bollinger band, but has failed to break through the upper band, indicating that it still faces some resistance in the short term.
The Bollinger Bands have slightly widened, indicating a recovery in exchange rate volatility. Regarding the MACD indicator, the DIFF and DEA lines have formed a golden cross, and the MACD histogram continues to close in the red, indicating a clear technical rebound. The Relative Strength Index (RSI) is at 57, not yet entering overbought territory, suggesting further upward momentum. Analysts believe that current key support lies at the double support area formed by the 0.8000 round number and the lower Bollinger Band. Above, resistance is expected at the previous high of 0.8170, which overlaps with the upper Bollinger Band.
Overall, the analysis shows that the current market is in a "volatile accumulation period during the rebound", and the short-term moving average tends to be bullish. If it can break through 0.8170 in large volume in the future, it may open up upward space.
The USD/CHF exchange rate is currently experiencing a typical "policy expectations game." Traders are assessing whether the Federal Reserve will prematurely cut interest rates amid a cooling economy, while also reacting to the uncertainty surrounding external shocks affecting Switzerland. The "institutional risks" arising from structural changes within the Federal Reserve are being interpreted by the market as strengthening monetary easing tendencies.
At the same time, traders remain highly alert to the deteriorating export environment in Switzerland, especially as the market consensus tends to believe that US tariffs may bring about a chain reaction, suppressing Swiss manufacturing profit margins and thus reducing the attractiveness of the Swiss franc as a safe-haven currency.
Short-term outlook:
In the short term, analysts believe that if the US ISM manufacturing data shows strong performance, the US dollar is expected to gain further upward momentum and the exchange rate is expected to challenge the 0.8170 resistance range. If this level is broken through with large volume, the technical structure will form a "small double bottom" reversal structure, and further upside targets may point to 0.8230 or even higher.
If the data falls short of expectations or other Fed members send dovish signals, the possibility of the exchange rate retesting the 0.8000 support area cannot be ruled out.
Medium- to long-term outlook:
In the medium term, the future direction of the USD/CHF exchange rate will continue to be driven by the Federal Reserve's policy path and the US's foreign economic policies. Analysts believe that if Trump continues with his tough tariff policy, the Swiss franc, as an exporting currency, may continue to come under pressure, while the USD will have a foundation for temporary strength.
However, it is important to note that the market has already established certain expectations for the Fed's September rate cut. If inflation data rebounds or the Fed's stance turns hawkish, the exchange rate may form a higher-dimensional "oscillation box";
For bullish traders, we maintain our hopes for a breakout above 0.8170; for bearish traders, we focus on whether 0.8000 is effectively broken, as a break below this level could trigger a new correction. Overall, the short-term technical outlook is bullish, and the trend has not yet reversed.
Fundamentals:
The sudden resignation of Kugler, a member of the US Federal Reserve Board, on Monday has intensified market speculation about the Fed's future policy direction. Since US President Trump may have an early opportunity to adjust the Fed's composition, the market expects him to nominate a candidate who advocates for looser policies, which will bring temporary buying to the US dollar.
Furthermore, while the Federal Reserve is expected to cut interest rates in September, San Francisco Fed President Mary Daly's remarks, emphasizing the need to "make decisions based on probabilities, rather than waiting for inflation to fully subside," suggest significant uncertainty about the policy path. This ambiguity is keeping short-term interest rate expectations flexible, contributing to the dollar's strength.
Meanwhile, the Swiss franc's pressure was directly triggered by the US announcement of a 39% tariff on Swiss goods (previously 31%), effective August 7th. Switzerland's economy is highly export-dependent, and this tariff adjustment is likely to exacerbate domestic deflationary pressures. Although annual inflation edged up to 0.2% in July, it remains below normal. Market bets on further easing by the Swiss National Bank (SNB) have intensified, leading to the Swiss franc's concessions to the US dollar.
Technical aspects:
The daily candlestick chart shows that the USD/CHF exchange rate has gradually rebounded after hitting a low of 0.7871. The current price is above the middle Bollinger band, but has failed to break through the upper band, indicating that it still faces some resistance in the short term.
The Bollinger Bands have slightly widened, indicating a recovery in exchange rate volatility. Regarding the MACD indicator, the DIFF and DEA lines have formed a golden cross, and the MACD histogram continues to close in the red, indicating a clear technical rebound. The Relative Strength Index (RSI) is at 57, not yet entering overbought territory, suggesting further upward momentum. Analysts believe that current key support lies at the double support area formed by the 0.8000 round number and the lower Bollinger Band. Above, resistance is expected at the previous high of 0.8170, which overlaps with the upper Bollinger Band.
Overall, the analysis shows that the current market is in a "volatile accumulation period during the rebound", and the short-term moving average tends to be bullish. If it can break through 0.8170 in large volume in the future, it may open up upward space.
Market sentiment observation:
The USD/CHF exchange rate is currently experiencing a typical "policy expectations game." Traders are assessing whether the Federal Reserve will prematurely cut interest rates amid a cooling economy, while also reacting to the uncertainty surrounding external shocks affecting Switzerland. The "institutional risks" arising from structural changes within the Federal Reserve are being interpreted by the market as strengthening monetary easing tendencies.
At the same time, traders remain highly alert to the deteriorating export environment in Switzerland, especially as the market consensus tends to believe that US tariffs may bring about a chain reaction, suppressing Swiss manufacturing profit margins and thus reducing the attractiveness of the Swiss franc as a safe-haven currency.
Market outlook:
Short-term outlook:
In the short term, analysts believe that if the US ISM manufacturing data shows strong performance, the US dollar is expected to gain further upward momentum and the exchange rate is expected to challenge the 0.8170 resistance range. If this level is broken through with large volume, the technical structure will form a "small double bottom" reversal structure, and further upside targets may point to 0.8230 or even higher.
If the data falls short of expectations or other Fed members send dovish signals, the possibility of the exchange rate retesting the 0.8000 support area cannot be ruled out.
Medium- to long-term outlook:
In the medium term, the future direction of the USD/CHF exchange rate will continue to be driven by the Federal Reserve's policy path and the US's foreign economic policies. Analysts believe that if Trump continues with his tough tariff policy, the Swiss franc, as an exporting currency, may continue to come under pressure, while the USD will have a foundation for temporary strength.
However, it is important to note that the market has already established certain expectations for the Fed's September rate cut. If inflation data rebounds or the Fed's stance turns hawkish, the exchange rate may form a higher-dimensional "oscillation box";
For bullish traders, we maintain our hopes for a breakout above 0.8170; for bearish traders, we focus on whether 0.8000 is effectively broken, as a break below this level could trigger a new correction. Overall, the short-term technical outlook is bullish, and the trend has not yet reversed.
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