USDCHF Under Pressure: Bearish Momentum Builds Amid Tariff Turmoil and SNB Rate Cut Risk

With USDCHF entrenched in a strong downtrend and macroeconomic headwinds building, the outlook remains tilted to the downside. Technical indicators reinforce bearish sentiment, while the franc’s safe-haven appeal—amplified by geopolitical tensions and US tariffs—adds pressure on Swiss policymakers. As markets await Friday’s UK GDP and US PPI prints, traders should stay alert to shifts in momentum and central bank signals that could recalibrate the near-term trajectory.

High Impact Economic Events

Friday 09:00 (GMT+3) – UK: GDP m/m (GBP)

Friday 15:30 (GMT+3) – USA: PPI m/m (USD)

Chart Analysis

Since peaking at 0.91956 on February 3, USDCHF has entered a clearly defined downtrend, characterized by a consistent sequence of lower highs and lower lows—hallmarks of sustained bearish momentum. The initial signal of trend exhaustion was evidenced by the emergence of a Shooting Star candlestick, a formation typically indicative of fading buying interest and the potential for a directional shift. This pattern marked the conclusion of the prior uptrend and the beginning of a broader bearish phase.

A failure-swing reversal further validated the bearish transition: the subsequent peak at 0.91545 remained below the previous peak, and price action later breached support at 0.90005. This structural breakdown confirmed a reversal and reinforced the shift in trend direction.

Further technical confirmation came through a “Death Cross” formation, as the 20-period Exponential Moving Average (EMA) crossed below the 50-period EMA—an event that typically signals mounting downside pressure and a deteriorating sentiment backdrop.

Momentum studies continue to support this bearish outlook. The Momentum Oscillator remains below the 100 threshold, highlighting persistent downside bias, while the Relative Strength Index (RSI) has remained anchored below 50, suggesting sustained selling interest. Taken together, these technical developments point to a market environment where downside risks remain elevated unless the pair can reclaim key resistance levels and reassert upward momentum.

Key Resistance Levels

Should the buyers take market control, traders may direct their attention toward the four potential resistance levels below:

0.84283: The initial resistance level is established at 0.84283, which mirrors the weekly support (turned to resistance), S1, estimated using the standard Pivot Points methodology.

0.86412: The second price target is set at 0.86412, reflecting the weekly Pivot Point, PP, calculated using the standard methodology.

0.88540: The third price objective is observed at 0.88540, corresponding to the peak marked March 31.

0.90346: An additional upside target is projected at 0.90346, mirroring the peak from February 28.

Key Support Levels

Should the sellers maintain market control, traders may consider the four potential support levels listed below:

0.81399: The initial support level is seen at 0.81399, corresponding to the daily low marked April 11.

0.80498: The second support level is estimated at 0.80498, representing the weekly support, S3, calculated using the standard Pivot Points methodology.

0.78617: The third support level is identified at 0.78617, reflecting the 161.8% Fibonacci Extension drawn from the monthly low point, 0.83728, to the monthly high point, 0.91998.

0.70674: An additional downside target is 0.70674.

Fundamentals

The Swiss franc has surged following US President Donald Trump’s sweeping tariff announcement, increasing pressure on Switzerland’s export-driven economy and raising the likelihood of the Swiss National Bank (SNB) cutting interest rates—possibly into negative territory. With inflation at just 0.3% and the franc at multi-month highs, analysts warn of rising deflation risks. While the SNB’s next policy decision is set for June, some economists believe it may act sooner. The bank has not ruled out negative rates, a tool it last used from 2014 to 2022 to manage currency strength and stabilize inflation.

In the meantime, Switzerland is seeking to deepen ties with the EU in response to tariff threats from former US President Donald Trump, which included a 31% levy on Swiss exports—despite the country abolishing industrial tariffs last year. The Swiss president, Karin Keller-Sutter, will attend an EU finance ministers meeting for the first time, signaling a shift toward closer cooperation. This follows a new framework agreement signed with the EU, due for a public referendum, covering areas like trade, freedom of movement, and food safety. While Euroscepticism remains strong at home, Trump’s tariff shock has sparked renewed urgency in aligning with Europe amid rising global uncertainty.

Conclusion

The markets turn their focus to Friday’s key data releases: UK GDP and US PPI. In FX, USDCHF remains under pressure, locked in a clear downtrend confirmed by multiple bearish technical signals, including a Death Cross and weak momentum indicators.

On the fundamental side, the Swiss franc has strengthened amid US tariff tensions, raising deflation risks and speculation of a potential SNB rate cut. Meanwhile, Switzerland is moving toward closer EU ties in response to the trade shock, adding a geopolitical layer to the currency’s outlook.