The US Dollar faces difficulty breaking past the 0.8225 resistance level in a descending channel, indicating bear control with a focus on the 0.8200 support. Despite supportive risk sentiment following a pause on European tariffs, the Dollar struggles against the Swiss Franc due to US fiscal concerns amidst Senate discussions on tax legislation.

Currently, the US Dollar shows varied strength against major currencies, being strongest against the Japanese Yen. Against other currencies, it fluctuates: -0.12% versus the EUR, -0.23% compared to the GBP, and 0.27% against the CAD.

Technical Outlook Suggests Bearish Trend

The technical outlook for USD/CHF sees continuous lower highs and lows, reflecting a bearish trend. With the 4-hour RSI under 50, bulls have twice failed to surpass the 0.8225 resistance, suggesting potential retesting of the 0.8200 support. Breaking below could see pressure towards 0.8170 and the 161.8% retracement at 0.8150. If bulls break 0.8225, focus may shift to 0.8270.

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The US Dollar continues to face downward pressure within its current downward channel, and despite attempts to recover, sellers have consistently managed to tighten their grip. Each attempt to breach the 0.8225 mark has failed, reinforcing the view that there’s little current appetite for higher prices in the pair. This resistance level remains well defended, especially after repeated bull attempts were turned away without much of a fight.

From a technical point of view, the structure is very telling. We’re observing a clear pattern of lower highs and lower lows. This behaviour usually indicates that the downward move hasn’t yet run its course. The Relative Strength Index (RSI) holding under 50 supports this, as it’s generally a measure of momentum – and it’s not suggesting that buyers are regaining control.

Concerns Over US Fiscal Policy

There is some downward momentum gathering again around 0.8200. Should this area give way, the next natural resting place appears around 0.8170, with further pressure possibly extending toward 0.8150. That 161.8% Fibonacci extension is not just an arbitrary line; historically, levels like that often offer medium-term targets and contribute to defining zones where profit-taking or stronger reactions can occur.

This weakness seems to persist despite an overall positive risk mood, which is odd at first glance. With European tariffs put on hold, markets broadly welcomed the sentiment, but this hasn’t translated into support for the Dollar in this pair. The softness here underscores concerns stemming from fiscal debate within US politics, particularly related to the direction of tax policy. Ongoing discussions in the Senate have left some investors uneasy, especially those watching Washington’s ability to progress with stability and restraint.

We’ve also noticed that greenback strength is not uniform. It’s currently holding up best against the Yen, which should come as no surprise given the ongoing yield gap and the Bank of Japan’s persistent dovish stance. But elsewhere, it’s losing a small percentage here and there – modest but noteworthy, especially when tallied over a period of days or weeks. A slip of -0.12% against the Euro or -0.23% in GBP/USD might not raise eyebrows day-to-day, but in terms of momentum, these drops suggest a grinding erosion of support. Against the Canadian Dollar, a small gain (+0.27%) again feels more a reflection of oil markets and relative growth expectations than a broad show of strength.

For those engaged in planning positions or managing exposure, the direction of the trend remains key. There’s little in the current configuration that points to strong reversal potential unless 0.8225 is breached and held. Otherwise, the risk sits to the downside, particularly if 0.8200 gives way and triggers heavier positioning down toward the lower extension zones. This scenario warrants close attention, especially during low-liquidity periods when moves can stretch more than usual.

When interpreting moves like these, it makes sense to view price development alongside the broader picture — not only in the Dollar’s own metrics but in risk sentiment more broadly. The disjoint between recent tariff news and actual FX movements points to something more deeply rooted. Perhaps policy uncertainty or budget clarity holds more sway than short-lived developments. Either way, price action is showing where conviction currently lies, and for now, it’s not favouring the Dollar in this pairing.

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