Insights 
VT 
USD/CHF has fallen to around 0.8240, as the US Dollar weakens further due to Moody’s degrading the US Sovereign Credit rating to Aa1 from Aaa. This decline continued during the European trading session for the third consecutive day.
The US Dollar Index has declined to approximately 99.50, the lowest in two weeks. The lack of consensus within the US political system regarding a new tax-cut bill, which could increase US debt by $3 trillion-$5 trillion, also contributed to the US Dollar’s depreciation.
Swiss National Bank Policy
Attention has turned to the Swiss National Bank’s policy amidst a sparse Swiss economic calendar. The SNB has indicated openness to negative interest rates in response to potential global economic challenges.
USD/CHF has dropped below the 20-day Exponential Moving Average (EMA) around 0.8340, maintaining a bearish short-term trend. The 14-day Relative Strength Index (RSI) fluctuates between 40.00-60.00, indicating reduced volatility.
Further declines past the May 7 low of 0.8186 may push the asset towards lower support levels. However, surpassing the 0.8500 level might facilitate recovery towards higher resistance points observed in April.
Market Sentiment and Technical Analysis
The recent downgrade of the US sovereign credit rating from Aaa to Aa1 by Moody’s has essentially knocked the wind out of the US Dollar’s sails. It’s the kind of fiscal marker that tends to rattle markets — not just because of the rating itself, but due to what it signals: mounting concerns over the long-term trajectory of American debt. This sentiment seems to have fed directly into the performance of USD/CHF, which continues to sink, now hovering near 0.8240. This latest drop marks its third straight decline during the European trading sessions, underlining the persistent weakness we’ve seen lately in the greenback.
Alongside the downgrade, political gridlock over a multi-trillion-dollar tax-cut bill has only steeled market nerves further. With the proposed bill potentially adding $3 trillion to $5 trillion to the debt pile, it’s no surprise that investor appetite for holding dollars has waned. The Dollar Index has now dropped to around 99.50, the lowest it’s been in two weeks — and that level holds more weight than it might appear at first glance. It’s often treated as a barometer for general confidence in the currency. This current downturn suggests sentiment remains tepid at best.
In the meantime, attention has shifted somewhat to the Swiss National Bank, mainly because Switzerland itself has presented little on the economic data front this week. The SNB has signalled it’s willing to consider cutting rates further below zero, hinting at preparation for global headwinds. While we may not be pricing much direct SNB movement in the near term, such remarks have a way of anchoring expectations.
From a technical standpoint, the breach below the 20-day EMA at 0.8340 matters. It draws a clear line around short-term momentum — the lower the pair holds under that level, the more sellers are likely to stay in control. The RSI holds between 40 and 60, so it doesn’t scream of overselling nor aggressive buying either; instead, it points to a stretch where momentum has softened but not entirely broken. For us, that means there’s still uncertainty, though leaning with a bearish tilt.
The next real figure for us is the May 7 trough at 0.8186. If that’s retested and gives way, it would confirm follow-through and expose the pair to more downside. We should then look to previous demand zones, potentially even testing lows not seen since early spring. On the other hand, if the pair rebounds and breaks past the 0.8500 marker, the move could flip sentiment on its head. That would likely trigger interest toward broader resistance that held up in April — but buyers would need persistence to carry it that far.
For those focused on options or other path-dependent plays, what’s playing out now is better built around tactically fading rallies rather than chasing extended moves downward. With volatility as it stands, patience and precision are the better tools until directional conviction shapes up more clearly from future catalysts.
