USDCHF is now back at the cycle lows after an incredible selloff

Fundamental Overview

The USDCHF pair saw one of the most aggressive selloffs in FX following the tariffs announcement last Wednesday as traders flocked to the Swiss Franc amid the risk-off flows. The CHF is the most popular safe haven in the forex world. The performance of the USD, on the other hand, has been mixed with gains against commodity currencies and losses against safe havens.

There’s no real divergence
in FX as the market continues to price in more and more cuts for all the
central banks and the general uncertainty weighs on conviction. For the SNB for example, the 2 year yield fell into negative territory at some point suggesting that the market expected negative rates coming back.

At the moment, the market is more driven by the
risk sentiment which changes very fast depending on the tariff headlines.The focus will remain on tariffs news as we head into the weekend. At the top of everyone’s mind is how things develop between US and China in the next days.

USDCHF Technical Analysis – Daily Timeframe

On the daily chart, we can see that we fell back to the cycle lows in just a few days. The buyers will likely step in around the lows with a defined risk below the lows to position for a rally back into the major trendline. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows (although the risk/reward doesn’t look good here).

USDCHF Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a minor downward trendline defining the bearish momentum. If we get a pullback into the trendline, we can expect the sellers to lean on it with a defined risk above it to position for a break below the cycle lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the next trendline.

USDCHF Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor resistance zone around the 0.8450 level. The sellers will likely continue to step in there to keep pushing into new lows, while the buyers will look for a break higher to extend the pullback into the trendline.