USD/CHF Slumps as CHF Attracts Safe-Haven Bids and Recession Fears Weigh on Dollar

Economic

Summary:

The USD/CHF currency pair extended its decline in Wednesday’s Asian session, weighed down by a weaker US Dollar amid growing recession fears and dovish Federal Reserve expectations.

SELL USDCHF

Close Time

CLOSED

0.81000

Entry Price

0.78000

0.83000

0.79587 +0.00005 +0.01%

46.8

Pips

Profit

0.78000

0.80532

Exit Price

0.81000

Entry Price

0.83000

The US Dollar is back under pressure, and the USD/CHF currency pair is bearing the brunt of it. After a modest recovery earlier this week, the pair came under fresh selling pressure during Wednesday’s Asian session, sliding back toward the mid-0.8100 just a hair above Friday’s ten-year low. With the bearish momentum showing no signs of abating, the current macroeconomic landscape paints a bleak short-term outlook for the greenback while reinforcing the long-term resilience of the Swiss Franc.

At the core of the latest decline is a deteriorating outlook for the US economy. Market sentiment is increasingly shifting toward a belief that the Federal Reserve may be compelled to cut interest rates more aggressively than previously anticipated. Investors now see the possibility of up to 100 basis points in rate cuts by the end of 2025—a seismic shift from earlier projections. This dovish re-pricing has sapped demand for the Dollar, with the US Dollar Index (DXY) hovering near its lowest levels since April 2022.

Recession fears are clearly mounting. Recent soft patches in US economic data, ranging from jobless claims to housing market indicators, have sparked concerns that the world’s largest economy may be heading toward a slowdown. The labor market, while still historically tight, has shown signs of fatigue. Combined with tightening credit conditions and slowing consumer spending, the probability of a technical recession is now squarely on the radar of both policymakers and investors alike.

The political landscape hasn’t helped either. The brief optimism following former President Donald Trump’s announcement to pause broad reciprocal tariffs for 90 days quickly fizzled out. Instead of easing nerves, the announcement injected a new layer of ambiguity into an already fragile geopolitical setting. Trump’s erratic stance on trade—especially toward China—has only added fuel to the fire, rattling markets and exacerbating uncertainty over the direction of global trade policy.

Against this backdrop, investors are doing what they’ve always done in times of turbulence: flocking to safe-haven assets. Chief among them is the Swiss Franc, which continues to attract inflows as a stable alternative. Switzerland’s long-standing reputation for political neutrality, sound fiscal management, and robust banking system makes the CHF a perennial safe-haven play, particularly in risk-off environments. This renewed global appetite for safety has underpinned the Franc and further weighed on USD/CHF.

From a broader perspective, the pair’s sustained downtrend, which began after reaching a year-to-date high in January, appears to be firmly intact. Barring a dramatic reversal in macroeconomic conditions or a hawkish pivot from the Fed, the path of least resistance remains clearly tilted to the downside.

Looking ahead, we will be laser-focused on Federal Reserve Chair Jerome Powell’s upcoming remarks, which could shed light on the central bank’s policy path. Any signs that the Fed is leaning more dovishly than the market already expects could reinforce the current bearish narrative for the Dollar.

Also on deck is the latest US retail sales report, which will offer fresh insight into the health of the American consumer. A disappointing print could further validate fears of a slowdown, adding to the pressure on the USD and accelerating the decline in USD/CHF.

Technical Analysis

From a technical standpoint, the USD/CHF’s intraday price action reflects the dominance of a well-entrenched bearish trend. The pair is tracking alongside a descending minor trend line on the short-term chart, and recent price action is beginning to diverge negatively from the RSI, which has pulled back from overbought levels. This suggests that downside momentum is building and that the pair may be gearing up for another leg lower.

Critically, the 0.8100 level is acting as near-term support, but any decisive break below this threshold could open the floodgates toward the 0.7800 region—a level not seen since 2011. Such a move would underscore the severity of the USD’s fundamental weakness and the growing strength of the CHF in this risk-averse environment.

TRADE RECOMMENDATION

SELL USDCHF

ENTRY PRICE: 0.8100

STOP LOSS: 0.8300

TAKE PROFIT: 0.7800

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Warren Takunda

Economic

Summary:

The EUR/GBP cross edged higher to around 0.8565 in early European trading on Wednesday, buoyed by a weaker Pound following softer-than-expected UK inflation data.

BUY EURGBP

Close Time

CLOSED

0.85800

Entry Price

0.87400

0.84800

0.87765 -0.00024 -0.03%

37.6

Pips

Profit

0.84800

0.86176

Exit Price

0.85800

Entry Price

0.87400

The Euro gained ground against the British Pound on Wednesday, with the EUR/GBP pair trading near 0.8565 during the early European session. The move was fueled by disappointing inflation data out of the UK, which suggested the Bank of England (BoE) may be inching closer to an interest rate cut of its own, while the European Central Bank (ECB) remains on a steady path toward monetary easing.

According to data released by the UK's Office for National Statistics (ONS), the Consumer Price Index (CPI) rose 2.6% year-on-year in March, easing from February’s 2.8% and coming in softer than the market’s 2.7% expectation. More notably, the monthly CPI figure climbed just 0.3%, a deceleration from February’s 0.4% increase and below the consensus forecast of another 0.4% print.

Core CPI—which strips out volatile food and energy prices—also remained stable at 3.4% YoY, matching expectations but down slightly from the previous 3.5%. These figures further reinforce the narrative that UK inflation pressures are gradually waning, reducing the urgency for the BoE to maintain its high-interest-rate stance.

The British Pound responded swiftly and negatively to the data, as traders began to price in a growing likelihood that the BoE could join other major central banks in easing monetary policy later this year. While the Bank has adopted a cautious tone in recent months, Governor Andrew Bailey and his colleagues have repeatedly emphasized the importance of incoming data. With CPI now trending closer to the 2% target, calls for a rate cut around mid-year are becoming louder.

From a market perspective, these inflation numbers increase the probability of a rate cut by the BoE in the summer. While wage growth remains a complicating factor, the inflation story is clearly moving in the right direction for doves on the Monetary Policy Committee (MPC).

Meanwhile, across the Channel, the ECB is widely anticipated to reduce its deposit rate by 25 basis points at its Thursday meeting, bringing the benchmark down to 2.25%. This would mark the third rate cut in the current cycle, reinforcing the bank’s pivot toward monetary easing amid slowing economic momentum in the Eurozone.

Expectations for the ECB move are already fully priced in, according to euro area swaps markets. A further dovish signal could materialize if Eurozone Harmonized Index of Consumer Prices (HICP) data due later on Wednesday aligns with forecasts or comes in weaker.

Rabobank's senior macro strategist, Bas van Geffen, recently highlighted short-term uncertainties such as global trade disruptions and geopolitical tensions, including former U.S. President Donald Trump's proposed tariffs, as key variables in the ECB's decision-making calculus. These headwinds, along with softening inflation in the bloc, make a rate cut not just likely, but necessary from a policy perspective.

Technical Analysis

From a technical standpoint, the EUR/GBP pair appears to be stabilizing after retreating from levels above 0.8700 earlier this month. The hourly chart shows the pair in a consolidation phase, recovering modestly after testing support near 0.8520.

Currently, the cross is trading just below the 50-hour simple moving average, with a minor uptick observed after reclaiming the 0.8540 handle. The next resistance level looms at around 0.8570, where a bearish trendline and the 23.6% Fibonacci retracement of the 0.8738 to 0.8518 downswing intersect.

A decisive break above 0.8570 could open the door for a more meaningful recovery, with the next key resistance at 0.8630—a level coinciding with the 50% Fibonacci retracement. Should bulls manage to push through that ceiling, upside momentum could extend toward 0.8685 and potentially as high as 0.8740.

Conversely, failure to hold above immediate support at 0.8520 may lead to renewed downside pressure. A break below 0.8500 would invalidate the short-term bullish setup, exposing the cross to further losses toward the 0.8360 zone, a level last seen in early February.

TRADE RECOMMENDATION

BUY EURGBP

ENTRY PRICE: 0.8580

STOP LOSS: 0.8480

TAKE PROFIT: 0.8740

Risk Warnings and Disclaimers

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Alan

Commodity

Summary:

The crude oil market remains trapped in a stalemate of supply-demand imbalance.

SELL WTI

Close Time

CLOSED

61.378

Entry Price

46.500

63.900

56.957 -0.276 -0.48%

252.2

Pips

Loss

46.500

63.910

Exit Price

61.378

Entry Price

63.900

Fundamentals

Yesterday, the International Energy Agency (IEA) released its latest report, forecasting global oil demand to grow by 730,000 barrels per day (b/d) in 2025, far below last month's prediction of 1.03 million b/d and marking the slowest growth rate in five years. This downward revision stems primarily from punitive tariffs imposed by the U.S. on major trading partners. The cut exceeds even the downward production adjustments announced by OPEC+ on Monday, further amplifying concerns over supply-demand imbalances.

Today, the White House announced that tariffs on Chinese goods imported to the U.S. have risen to a maximum of 245% due to China's retaliatory trade measures. This escalation intensifies U.S.-China trade friction, directly disrupting bilateral trade flows and global supply chain efficiency. Rising trade tensions could lead to a sustained contraction in new export orders for Chinese manufacturing, further weakening China's crude oil import momentum amid slowing Q1 GDP growth.

On the supply side, the oversupply trend is worsening. While OPEC+ plans to increase output by 411,000 b/d starting in May, actual production may far exceed quotas. Data shows Russia's March output reached 10.5 million b/d, with Kazakhstan exceeding its quota by 390,000 b/d, pushing total incremental supply beyond 600,000 b/d.

In general, the crude oil market remains stuck in a supply-demand stalemate, with prices likely to stay under pressure.

Technical Analysis

Based on the daily chart, WTI starts the overbought rebound and surges to the pressure level of 62.5. Meanwhile, it also reaches the 10-day SMA and forms a resonance, adding difficulty to move upward. Short−term upside momentum faces headwinds. If WTI exhibits weakening signals, it is extremely likely to depreciate further. But if WTI crosses over 62.5 and ascends, it may test the overhead pressure level at 65.00.

Trading Recommendations

Trading direction: Sell

Entry price: 61.40

Target price: 46.50

Stop loss: 63.90

Valid Until: April 30, 2025, 23:00:00

Support: 54.75/50.00

Resistance: 62.76/65.00

Risk Warnings and Disclaimers

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Manuel

Forex

Economic

Summary:

If bulls begin to step in at this level, it could mark the start of a renewed upward move, aligning with the prevailing bullish trend.

BUY EURUSD

Close Time

CLOSED

1.12999

Entry Price

1.14280

1.11700

1.17493 +0.00099 +0.08%

65.9

Pips

Profit

1.11700

1.13658

Exit Price

1.12999

Entry Price

1.14280

The European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points on Thursday, as recession concerns—partly fueled by ongoing U.S. tariff measures—continue to weigh on the eurozone outlook. Hadrien Camatte, Senior Economist at Natixis, suggested that the ECB could lower all three of its key interest rates during April's policy meeting.

The central bank had already lowered rates for a second consecutive time in March, bringing the deposit rate down to 2.5%. A further cut would push it to 2.25%.

Meanwhile, in the U.S., the latest Empire State Manufacturing Index showed notable improvement, climbing by 11.9 points in April to -8.1, up from March’s reading of -20. This was the best figure in two months and surpassed expectations, which had projected a smaller recovery to -14.5.

Despite the improvement, business activity in New York State remained in contraction territory. Survey participants reported slight declines in both new orders and shipments. Delivery times stayed largely unchanged, while supply availability deteriorated further. Inventory levels, however, continued to rise.

“Following a sharp drop last month, activity contracted only slightly in April,” noted Richard Deitz, Economic Research Advisor at the Federal Reserve Bank of New York. “Prices paid and received rose at the fastest pace in over two years. For the first time since 2022, firms expressed clear pessimism about future conditions.”

Elsewhere, U.S. Treasury Secretary Scott Bessent downplayed fears of a financial emergency, reassuring markets that the U.S. economy remains on stable ground. He emphasized that concerns over an imminent crisis were largely unfounded and reaffirmed the administration’s commitment to “fair” trade negotiations. These discussions, according to the Trump administration, are necessary steps to help balance the federal budget.

Federal Reserve officials also delivered a more cautious message. Atlanta Fed President Raphael Bostic stated that the central bank is still some distance from achieving its 2% inflation target. His remarks cooled recent speculation around early rate cuts, pointing instead to persistent inflationary pressures that continue to complicate the Fed's policy outlook.

Similarly, St. Louis Fed President Alberto Musalem warned that inflation could reaccelerate even as the labor market shows signs of weakening. He emphasized the need for a data-driven approach and highlighted the risks of inflation rising independently of employment trends. Musalem also noted that anchoring long-term inflation expectations is essential, especially in the face of uncertain fiscal and trade dynamics.

“There’s substantial uncertainty regarding the timing and cumulative impact of shifting trade, immigration, and regulatory policies,” Musalem stated during a speech in Hot Springs, Arkansas. “We have to remain open to the possibility that inflation could pick up even if labor conditions continue to deteriorate.” Bullish Trend Could Resume If Buyers Defend Support_1

Bullish Trend Could Resume If Buyers Defend Support_1

Technical Analysis

EURUSD has pulled back toward key support at 1.1273, hovering just above the 100-period moving average on the 1-hour chart, currently around 1.1265. If this support zone holds, it could provide a platform for buyers to re-enter the market and potentially drive the pair higher toward local resistance near 1.1428. A breakout above that level could confirm a continuation of the broader bullish trend, especially if a new local high is formed.

From a momentum standpoint, the Relative Strength Index (RSI) recently dipped to 33, edging closer to oversold territory. This suggests that bearish momentum may be fading, and a reversal could be in sight. If bulls begin to step in at this level, it could mark the start of a renewed upward move, aligning with the prevailing bullish trend.

However, if the support fails and the pair breaks lower, the 200-period moving average could come into focus as the next downside target.

Trading Recommendations

Trading direction: Buy

Entry price: 1.1293

Target price: 1.1428

Stop loss: 1.1170

Validity: Apr 23, 2025 15:00:00

Risk Warnings and Disclaimers

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