USD/CHF drops to a three-month low as strong safe-haven demand boosts the Swiss franc

USD/CHF remains under pressure at the start of the week, hitting a fresh three-month low as the Swiss franc continues to gain amid rising concerns over overheated economic conditions and escalating geopolitical risks.

Investor worries persist over the potential fallout from tariffs on imports from Canada, Mexico, and China. The anticipated disruption to trade flows, higher consumer prices, and the risk of accelerating inflation could push the U.S. economy closer to recession, further fueling demand for safe-haven assets like the Swiss franc.

The pair fell 2.5% last week, marking its largest weekly decline since late July last year. The U.S. dollar faced heavy selling pressure amid mounting fears of a global trade war, while the franc benefited from a flight to safety.

In the near term, the outlook remains bearish, reinforced by a strong negative weekly candle, Friday’s close below the 200-day moving average (DMA) at 0.8815, and a break through the key 50% Fibonacci retracement support at 0.8787 (of the 0.8374–0.9200 rally).

Technical indicators on the daily chart maintain a firm bearish stance, with strong negative momentum and moving averages aligned in a bearish configuration, including a fresh 10/100 DMA bearish crossover.

A sustained break below the 0.8787 Fibonacci support would strengthen the bearish outlook, opening the door for a deeper decline toward the psychological 0.8700 level and the 61.8% Fibonacci retracement.

However, oversold conditions suggest a potential pause in the downtrend, with the 200DMA expected to cap any recovery attempts. Extended upticks should stay below the broken 38.2% Fibonacci level at 0.8885 to keep the broader bearish trend intact.

Res: 0.8815; 0.8851; 0.8885; 0.8906
Sup: 0.8762; 0.8725; 0.8690; 0.8615