USDCHF enters essential zone as promoting stress mounts

The USDCHF is experiencing a sharp decline for the second consecutive day. Despite Swiss CPI inflation coming in lower than expected at -0.1% MoM and 0.4% YoY, while US CPI and PPI showed stronger inflation, the pair has moved lower instead of higher—suggesting that other factors, such as geopolitical risks, political developments, and technical breaks, are influencing price action.

This week, the 100/200-hour moving averages and the 100/200-bar moving averages on the 4-hour chart were all breached, reinforcing the downside momentum. Today, USDCHF is down -0.55%, reaching a session low of 0.8971, which tested a key swing area between 0.8965 and 0.8974 (see green numbered circles on the chart). Currently, the price is modestly above that level at 0.8981, making this zone a key support area where traders may look to buy with a stop below.

If the price breaks below 0.8965, further downside momentum could push the pair toward the next swing area at 0.8914–0.8922. A deeper break below that would shift focus to the 38.2% retracement of the September 2024 rally at 0.8882, followed by the 100-day moving average at 0.8864.

The key question heading into the weekly close is whether the bearish momentum can sustain itself and drive the pair lower. Buyers will be looking to defend current support, while sellers will be eyeing a confirmed break for another leg down. This remains a crucial technical level for both sides.