Bearish Momentum Poised for Resumption Following Technical Upside Correction

Manuel

Forex

Economic

Summary:

This rejection has initiated a corrective move to the downside, defined by a newly formed descending trendline.

SELL USDCHF

EXP

PENDING

0.77620

Entry Price

0.76400

0.78100

0.77470 +0.00074 +0.10%

Pips

PENDING

0.76400

Exit Price

0.77620

Entry Price

0.78100

Global trade tensions remain at the epicenter of market sentiment as President Donald Trump’s new 10% universal tariff officially takes effect this Tuesday. This significant policy maneuver follows a high-profile ruling by the U.S. Supreme Court last week, which adjudicated that the administration’s reliance on the International Emergency Economic Powers Act (IEEPA) to implement broad reciprocal tariffs was unlawful. While the current levy is established at 10%, White House officials have signaled that a formal executive order is currently being drafted to escalate this rate to 15%. This rapid and aggressive shift in U.S. trade policy has introduced a fresh wave of uncertainty regarding long-term trade stability and the integrity of existing bilateral agreements.

Compounding this atmospheric uncertainty, Federal Reserve rhetoric remains characteristically cautious. Chicago Fed President Austan Goolsbee expressed a lingering optimism regarding the potential for additional rate cuts this year; however, he emphasized that policymakers require more definitive evidence that inflation is sustainably returning to the 2% target. This sentiment was echoed in the latest FOMC minutes, which revealed that several committee members view further monetary easing as premature in the absence of sustained disinflationary progress. Despite this central bank hesitation, market participants continue to price in several 25-basis point reductions for the current fiscal year, creating a notable disconnect between official guidance and market expectations.

In terms of domestic economic data, the ADP Employment Change four-week average edged higher to 12.8K, up from the previous 11.5K. Simultaneously, the Conference Board’s Consumer Confidence Index surged to 91.2, comfortably exceeding the 87.1 forecast. However, the broader private sector exhibited a discernible loss of velocity through February. The preliminary S&P Global Composite PMI moderated to 52.3 from 53.0, reflecting a pervasive cooling across the economic landscape.

This decelerating trend was particularly evident in the Manufacturing PMI, which retreated to 51.2, and the Services sector, which slipped to 52.3. On the inflationary front, the latest Core PCE figures—showing a 0.4% monthly advance and a 3.0% annual rate—suggest that underlying price pressures remain stubbornly entrenched. This inflationary "stickiness" coincides with a disappointing Q4 2025 GDP estimate of 1.4%, a sharp contrast to the robust 4.4% growth recorded in the preceding quarter.

Across the Atlantic, data released by the Swiss Federal Statistical Office revealed that production and import prices contracted by 0.2% month-over-month in January, defying expectations of a 0.1% increase. On an annual basis, these prices tumbled by 2.2%. Consequently, the Swiss Franc (CHF) has gained significant traction as investors recalibrate their expectations for the Swiss National Bank (SNB). With Swiss inflation printing at a marginal 0.1%—at the absolute floor of the SNB's 0–2% target range—the likelihood of near-term rate cuts has diminished, supporting a policy status quo through 2026. Bearish Momentum Poised for Resumption Following Technical Upside Correction_1

Bearish Momentum Poised for Resumption Following Technical Upside Correction_1

Technical Analysis

From a technical perspective, USD/CHF has encountered a supply wall after failing to sustain a breakout above the 0.7773 resistance level reached on February 20. This rejection has initiated a corrective move to the downside, defined by a newly formed descending trendline.

The pair’s structural outlook is currently dominated by the 200-period Moving Average, situated at 0.7805, which provides heavy overhead resistance. Meanwhile, the 100-period Moving Average is currently positioned at 0.7726. Should the price action achieve a decisive close beneath this 100-period MA, we anticipate an acceleration of the bearish impulse toward the primary horizontal support target at 0.7640.

Our analysis of momentum oscillators reinforces this bearish outlook. The RSI recently struck a reading of 72 as the price approached the aforementioned resistance, signaling overbought conditions and a likely corrective pivot. Simultaneously, the MACD is printing a negative histogram with bars gaining structural depth. While the signal lines remain tentatively above the neutral threshold, a bearish crossover would confirm that the bears have successfully retaken control of the narrative.

Trading Recommendations

Trading direction: Sell

Entry price: 0.7762

Target price: 0.7640

Stop loss: 0.7810

Validity: Mar 06, 2026 15:00:00

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Bearish Momentum Poised for Resumption Following Technical Upside Correction

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