USD/CHF falls as the US credit reduction lasts the feeling

• The USD/CHF quotes 0.5% lower than 0.8330 in a strong sale pressure of the dollar.
• Moody’s reduced US credit rating to ‘AA1’ from ‘AAA’, citing tax deterioration.
• Technical levels show immediate support around 0.8300, with resistance at 0.8380 and 0.8430.

The USD/CHF torque is quoting 0.5% lower around 0.8330 during negotiation hours in North America on Monday, reflecting a sharp fall in the feeling of the US dollar after the reduction of Moody’s to the long -term credit rating of the United States from AAA to AA1. This marks a significant blow to the perceived stability of the US dollar, pressing the dollar even more in the midst of ongoing fiscal challenges.

The US dollar faces winds against significant after the decision of Moody’s to reduce the long -term emitter ratings and non -guaranteed senior debt of the US. The agency cited the debt of 36 billion dollars and the decrease in fiscal indicators as key reasons for the reduction, reflecting increasing concerns about the sustainability of US finances. The reduction has pushed the yields of the US Treasury bonds to 10 years to almost 4.52%, since investors require greater compensation for the perceived risk of maintaining US debt.

Meanwhile, Fed officials adopted a cautious tone on Monday. The Vice President of the Fed, Philip Jefferson, highlighted the risks for both employment and inflation, suggesting an approach to “wait and see” for future decisions about rates given the current economic uncertainty. The president of the Fed in New York, John Williams, echoed these feelings, pointing out that the recent US data remains solid, but that uncertainties around trade continue to raise risks. The president of the Atlanta Fed, Raphael Bostic, also indicated that inflation is not moving towards the target as fast as it anticipated, reinforcing the opinion that additional rate cuts can be limited this year.

On the Swiss side, the Swiss National Bank (SNB) is expected to maintain a dovish posture as commercial tensions remain high, which could increase the attractiveness of the Swiss Franco as a safe refuge. However, the broader market approach remains focused on the fiscal perspective of the US and the possible impact of the highest indebtedness costs on the global economy.

Technical analysis

From a technical perspective, the USD/CHF has broken below key support levels, reflecting the broader bearish trend. The immediate support is now observed around 0.8300, followed by 0.8270 and 0.8220. On the positive side, the resistance is likely to arise around 0.8380, followed by the 0.8430 area, which marks a significant barrier for additional recovery.

The Relative Force Index (RSI) remains in bassist territory, suggesting continuous down pressure, while the MACD points down, reinforcing the negative perspective. The simple mobile average (SMA) of 20 days has also turned down, providing greater resistance to any possible recovery.

With the reduction of Moody’s adding to the negative feeling around the US dollar, it is likely that the USD/CHF will remain under pressure in the short term. The operators will be observing the US economic data and the additional comments of the FED in search of a possible policy change, while the attractiveness of the Swiss Franco as a safe refuge can provide an additional risk to the decline for the torque.

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