USD/CHF traded near 0.7720 on Wednesday, still in a daily downtrend. It remained below the 50-day EMA at 0.7868 and the 200-day EMA at 0.8120, after rebounding from 0.7605 in late January and falling from a January swing high near 0.8040.
US January NFP rose 130K versus a 70K consensus and December’s revised 48K. BLS benchmark revisions cut total 2025 nonfarm employment by 898K and lowered average monthly job growth from 49K to 15K; unemployment eased to 4.3% from 4.4% and hourly earnings rose 0.4% month-on-month versus 0.3% forecast.
Fed Cut Timing Shifts
The data pushed expected Fed rate cuts from spring towards July. On lower timeframes, the Stochastic Oscillator (14,5,5) moved up from oversold, while the pair stayed below 0.7750; a break above 0.7800 would bring the 0.7868 EMA into view.
If price drops under 0.7650, focus returns to 0.7605, then 0.7500. A Fed Governor Schmid speech carried a hawkish 7.0 rating, with Governor Bowman due later.
The US dollar saw a brief surge after the January jobs report showed a headline gain of 130,000, which was much better than expected. This immediate strength in USD/CHF is likely a temporary reaction to the news. We see this as a selling opportunity against the established downtrend.
The bigger story is that the government revised the job numbers for all of 2025, revealing the US economy was far weaker than we believed last year. The data shows average monthly job growth in 2025 was just 15,000, a sharp drop from the 49,000 previously reported. This fundamental weakness suggests the US dollar’s strength will not last.
While the market has pushed expectations for a Federal Reserve rate cut from spring to July, this underlying economic softness makes it difficult for the Fed to remain hawkish. The CME FedWatch Tool now shows a 65% probability of a rate cut by the July meeting. We expect this probability to increase as the market digests the weak 2025 employment revisions.
Swiss Franc Policy Divergence
Meanwhile, the Swiss economy remains stable, with recent data showing inflation at 1.7%, comfortably within the Swiss National Bank’s target range. This gives the SNB little reason to cut its own interest rates, creating a policy divergence that favors a stronger Swiss franc. The franc’s safe-haven status will also attract capital if fears of a US slowdown grow.
For the coming weeks, we should consider using this temporary strength in USD/CHF to establish bearish positions. Selling call options with a strike price around 0.7800 would be a way to bet that the pair’s rally will stall below key resistance levels. This strategy profits from the pair either falling or moving sideways.
Looking at the downside, a break below 0.7650 support would open the way to retest the year’s low near 0.7605. Buying put options with a 0.7650 strike could be an effective way to position for a resumption of the downtrend. Historically, when we’ve seen such significant downward revisions to US labor data, as we did in 2019, the dollar has typically underperformed for the next two quarters.
