Key Moments
- The US Dollar is under pressure after President Trump threatened tariffs tied to a possible Greenland purchase.
- The Swiss Franc strengthened on renewed risk-off sentiment, erasing its January gains in days.
- Traders are watching key USDCHF levels near 0.7900 and 0.7870, ahead of U.S. data and Trump’s Davos speech.
De-Dollarisation Concerns Weigh on USD
The US Dollar has softened across major pairs this week. This follows an escalation by President Trump over the US proposal to buy Greenland. He threatened 10% tariffs from February 1 on the UK, France, Germany and other European nations. The tariffs would rise to 25% from June 1 if no agreement is reached.
As a result, investors are again focused on de-dollarisation themes. They see the move as another erratic US policy shift. Therefore, recent long USD trades have been squeezed and the dollar has pulled back.
Previously, dollar strength was supported by slightly more hawkish expectations. However, the latest geopolitical escalation reversed much of that trend. If the situation de-escalates, the dollar could rebound again. This could happen especially if upcoming US data shows stronger growth.
Trump is scheduled to speak tomorrow at the World Economic Forum in Davos. He is also expected to discuss Greenland with European leaders. Markets will react to any headlines or posts on Truth Social. These could signal either a softening or a tougher stance.
Swiss Franc Benefits from Flight to Safety
The Swiss Franc has been one of the main beneficiaries of the risk-off mood. In terms of policy, there were no major changes. At its latest meeting, the Swiss National Bank (SNB) kept policy unchanged and maintained a constructive outlook.
SNB officials continue to stress that the threshold for adjusting negative rates remains high. Therefore, CHF moves are driven mainly by global risk sentiment rather than domestic policy.
USDCHF Technical Picture by Timeframe
Daily Chart: January Gains Unwound
On the daily chart, USDCHF gave back all of its January gains in just a few sessions. If the decline continues, buyers will likely focus on support near 0.7870. This area could attract dip-buying. Conversely, a break below it could push the pair toward new cycle lows.
4-Hour Chart: Testing a Key Swing Zone
On the 4-hour chart, USDCHF is testing a key swing level near 0.7900. This zone may attract early dip-buyers who can set risk just below it. However, a clear break below this level could trigger further downside toward 0.7870.
1-Hour Chart: Range Low Hit, Momentum Capped
On the 1-hour chart, USDCHF has hit the lower end of today’s average range. Often, this leads to consolidation or a corrective bounce. A descending trendline still caps the near-term momentum.
If a rebound forms, sellers may use the trendline as resistance. They may place stops above it and aim for a continuation lower. Meanwhile, buyers will look for a break above the trendline to confirm a bullish shift.
Key USDCHF Levels
| Timeframe | Level | Technical Significance |
|---|---|---|
| Daily | 0.7870 | Major support; key reference for new cycle lows if broken |
| 4-hour | 0.7900 | Important swing level; entry zone for dip-buyers or trigger for downside |
| Intraday | Average daily range low (today) | Area where consolidation or pullback often forms |
Upcoming Market Catalysts
Several events could influence USDCHF and risk sentiment this week:
- Today: US ADP employment data and a possible Supreme Court decision on tariffs.
- Tomorrow: Trump speaks at Davos and may comment on Greenland.
- Thursday: US Jobless Claims release.
- Friday: US Flash PMIs.
In addition, traders will monitor headlines and Truth Social posts from Trump. Market attention remains focused on this escalation and its impact on the dollar and risk sentiment.
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