The USD/CHF pair extended its decline on Friday, slipping under the 50-day Simple Moving Average (SMA) at 0.8020. The move followed a weaker-than-expected US Nonfarm Payrolls (NFP) report, which strengthened expectations for a Federal Reserve rate cut at the September policy meeting. At the time of writing, the pair is trading at 0.7980, down 0.94% on the day.
Technical outlook
Price action shows that sellers have regained control, with the pair closing below the key 0.8000 level on both the daily and weekly charts. This development increases the likelihood of a retest of the year-to-date (YTD) low at 0.7872, recorded on July 1.
Momentum indicators also favor the bearish case, with the Relative Strength Index (RSI) pointing to further downside pressure.
If USD/CHF breaks below 0.7950, it would open the door for a move toward the July 23 low at 0.7911. A decisive break there could pave the way for a test of the 0.7900 handle, and ultimately the YTD trough.
On the upside, a recovery above 0.8000 would be the first sign of a potential rebound. Buyers would then need to reclaim the 50-day SMA, followed by resistance at the 20-day SMA near 0.8047. The next key hurdle sits at the 100-day SMA around 0.8122.
