USD/CHF catches a bid on NFP beat, but downtrend remains in place
- USD/CHF caught a much-needed leg up on Wednesday.
- NFP job gains beat expectations, driving Fed rate cut bets further out.
USD/CHF is holding a firm downtrend on the daily chart on Wednesday, trading near 0.7720, well below both the 50-day Exponential Moving Average (EMA) at 0.7868 and the 200-day EMA at 0.8120. The pair bounced off 0.7605 lows in late January but has failed to reclaim any meaningful ground, with lower highs and lower lows defining structure since the January swing high near 0.8040. Wednesday's delayed Nonfarm Payrolls (NFP) release came in at 130K for January, nearly double the 70K consensus and well above December's revised 48K. However, the Bureau of Labor Statistics (BLS) annual benchmark revisions told a different story, slashing total 2025 nonfarm employment by 898K and cutting average monthly job growth from the previously reported 49K to just 15K. The unemployment rate ticked down to 4.3% from 4.4%, while average hourly earnings rose 0.4% month-over-month, above the 0.3% forecast. The stronger-than-expected headline and hotter wage growth pushed back Federal Reserve (Fed) rate cut expectations from spring to July, providing a short-term bid under the US Dollar (USD).
Technicals still tilt toward the bearish side
On the lower timeframes, the Stochastic Oscillator (14,5,5) is churning on the lower half of the indicator scale, climbing out of oversold territory and suggesting near-term upside momentum is building. The pair saw an intraday bounce following the NFP data, but price remains capped below the 0.7750 area where sellers stepped in during last week's sessions. For bulls to gain traction, a sustained break above 0.7800 would be needed to challenge the 50-day EMA at 0.7868. On the downside, a failure to hold above 0.7650 would reopen the path toward the 2026 low at 0.7605, with the psychological 0.7500 level as the next target below that. Fed Governor Schmid's speech today carried a hawkish 7.0 rating, and with Fed Governor Bowman also speaking later, the pair's direction into Thursday will likely hinge on whether the market continues repricing rate cuts further out or refocuses on the weak underlying 2025 labor trend exposed by the benchmark revisions.
USD/CHF daily chart
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
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