Dollar slides as December cut bets harden; USD/CHF capped below 0.81 ahead of ISM and Swiss CPI
The dollar eased across G10 as traders priced an almost certain Fed rate cut in December, leaving USD/CHF stuck beneath the 0.81 handle. With macro catalysts sparse before the FOMC, attention turns to U.S. ISM readings, ADP, jobless claims and Friday’s sentiment data, alongside Switzerland’s CPI.
Fed expectations anchor FX; CHF tracks risk mood
The greenback’s pullback deepened after dovish-leaning Fed commentary and softer high-frequency labor indicators. Futures now imply roughly a 90% probability of a December rate cut, curbing U.S. short-end yields and pressuring the dollar. With limited top-tier data before the Fed meeting, incoming jobless claims and ADP figures are likely to steer near-term positioning, though the decisive impulses will come from the FOMC itself and subsequent NFP and CPI prints.
On the franc side, the Swiss National Bank recently left policy unchanged and continues to signal that the bar for returning to negative rates remains high. That keeps CHF mainly trading with risk sentiment and relative rates. Swiss CPI this week is unlikely to meaningfully alter the SNB outlook.
Liquidity remains seasonal and FX volatility is subdued, favoring tactical, data-driven moves. Risk appetite has steadied on the prospect of easier Fed policy, a dynamic that typically weighs on USD but can mute safe-haven CHF demand—leaving USD/CHF anchored by U.S. rate expectations.
USD/CHF technical outlook
Daily chart
USD/CHF briefly revisited the 0.81 region before slipping, reinforcing a broad range environment. The pair lacks trend conviction on the daily timeframe, with traders watching for a catalyst to break the stalemate.
4-hour chart
A descending trendline is guiding the current pullback. Sellers are leaning against that line with risk defined above it, eyeing a retest of support near 0.7980. A sustained break above the trendline would likely force short-covering toward 0.8170.
1-hour chart
Intraday, a minor shelf around 0.8025 has attracted dip buyers. Bulls may defend this zone to stage a bounce into the 4-hour trendline, while bears will look for a clean breakdown through 0.8025 to extend losses into the 0.7980 support. Today’s average range suggests momentum could accelerate on a break, given thinner liquidity pockets.
Week-ahead catalysts
– Today: U.S. ISM Manufacturing PMI
– Wednesday: Switzerland CPI; U.S. ADP Employment; U.S. ISM Services PMI
– Thursday: U.S. Initial Jobless Claims
– Friday: University of Michigan Consumer Sentiment
Soft U.S. surprises should keep pressure on the dollar, while upside data risks a short-lived squeeze. The overarching narrative, however, remains tied to the FOMC path and the durability of disinflation.
Key points
- Dovish Fed expectations weigh on USD; futures price near-certain December cut.
- USD/CHF capped under 0.81, with rangebound behavior on the daily timeframe.
- 4-hour downtrendline in focus; sellers target 0.7980, buyers need a trendline break toward 0.8170.
- Intraday support sits at 0.8025; a break exposes 0.7980.
- SNB steady; Swiss CPI unlikely to shift policy guidance, leaving CHF driven by risk sentiment.
- Upcoming U.S. ISM, ADP, jobless claims and sentiment data to guide short-term USD swings.
FAQ
Why is the U.S. dollar weakening?
The dollar is under pressure as traders price an almost certain December Fed rate cut and react to softer U.S. labor indicators. Lower front-end yields and subdued FX volatility have encouraged selling in the greenback.
What could reverse the downside in USD/CHF?
A stronger-than-expected run of U.S. data—particularly ISM Services or jobless claims—could lift yields and spark a USD/CHF rebound. Technically, a break above the 4-hour downtrendline would open room toward 0.8170.
How important is Swiss CPI for the franc?
It matters for inflation dynamics, but given the SNB’s steady stance and high bar for policy shifts, a modest CPI surprise is unlikely to change the near-term outlook. CHF remains more sensitive to global risk appetite and relative rate moves.
What are the key USD/CHF levels to watch?
Support is clustered at 0.8025 intraday and 0.7980 below. Resistance sits near the descending trendline on the 4-hour chart and around 0.8170 above. A daily close beyond these boundaries would signal directional intent.
How should traders position into the FOMC?
With event risk high and liquidity mixed, many prefer tactical trades around data prints. A balanced approach is to define risk at nearby technical levels (0.8025/0.7980 support; trendline/0.8170 resistance) while acknowledging that NFP and CPI after the meeting could reset the broader narrative, BPayNews notes.
