Sample Category Title

The USD/CHF’s sideways range environment since its 1 August 2025 swing high of 0.8170 has been getting compressed as we approach the key risk event for the FX market this week, the US non-farm payrolls and unemployment rate for August out this Friday, 5 September.

SNB rate cut cycle likely over as Swiss leading economic data improves in August

Fig. 1: Switzerland Manufacturing PMI as of Aug 2025 (Source: Trading Economics)

Fig. 2: Switzerland Services PMI as of Aug 2025 (Source: Trading Economics)

The Swiss National Bank (SNB) was the first major central bank to initiate an easing cycle in March 2024, delivering six consecutive cuts totalling 175 basis points. This brought the policy rate down from a 10-year high of 1.75% to 0% by June 2025, marking the first return to zero borrowing costs since the negative-rate era that ended in late 2022.

The next SNB monetary policy meeting will be held on 29 September, and there is a likelihood that the SNB may pause its interest rate cut cycle as two leading economic data points have started to show subtle signs of demand improvement in Switzerland.

The Swiss manufacturing PMI rose slightly to 49.0 in August from 48.8 in July, while manufacturing activities remain in contraction mode (below 50), but its negative growth momentum has continued to subside from the May 2025 print of 42.1.

In addition, service activities in Switzerland showed minor improvements as the services PMI increased to 43.9 in August from a five-year low of 41.80 printed in July.

Let’s now examine the medium-term outlook (1-3 weeks) on the USD/CHF from a technical analysis perspective.

Fig. 3: USD/CHF medium-term trend as of 4 Sep 2025 (Source: TradingView)
Preferred trend bias (1-3 weeks)

Potential bearish breakdown from the ongoing five-week range below 0.8100 key medium-term pivotal resistance, with downside trigger level at 0.7990 to expose the next supports at 0.7920/0.7870 and 0.7795 (see Fig. 3).

Key elements

• The recent bounces seen in the USD/CHF since 1 August 2025 have failed to surpass the upper boundary of the medium-term descending channel from the 3 February 2025 high, which suggests the lack of bullish momentum.
• The 4-hour Bollinger Bandwidth indicator has continued to hover at a relatively low level of 1, which highlights a volatility compression condition, a prelude to a volatility expansion that may trigger a potential imminent outburst in the price actions of USD/CHF.
• The yield spread (premium) between the 2-year US Treasury note and the 2-year Swiss government bond has continued to shrink to 3.70% since its bearish breakdown on 1 August 2025, where it was at 4.07% on 31 July 2025.
• Recently, on 22 August 2025, the 2-year yield spread of the US Treasury note and the Swiss government bond flashed out a similar bearish breakdown and traded below its 50-day moving average.
• These observations suggest that 2-year US Treasury notes are getting less attractive over similar tenures of Swiss government bonds in terms of yields, which in turn can put downside pressure on the USD/CHF.

Alternative trend bias (1 to 3 weeks)

A clearance above 0.8100 key resistance invalidates the bearish tone on the USD/CHF for a squeeze up towards the next medium-term resistances at 0.8170 and 0.8250.

The US currency managed to regain some ground in the first half of the week, yet no solid foundation for sustained growth has emerged. Market participants remain cautious, weighing both the latest macroeconomic data and expectations ahead of the release of the US non-farm payrolls report (NFP). This publication is traditionally regarded as a key indicator for assessing the Federal Reserve’s next steps and is capable of setting the tone for markets in the coming weeks. Meanwhile, with persistent pressure on the dollar, more analysts are expecting an increase in net short positions by the end of September.

Today’s statistics from the US and Canada add to market nerves: jobless claims, business activity indices (PMI), and trade balance figures could adjust short-term expectations. Another driver is Canadian labour market data (5 September at 15:30 GMT+3), which could influence the dynamics of the USD/CAD pair.

USD/CAD

Following the formation of a bullish engulfing pattern on the daily timeframe, the USD/CAD pair managed to test key resistance at 1.3800. Technical analysis of USD/CAD points to potential strengthening towards 1.3860–1.3900 if the 1.3800 level turns into support. A pullback from current levels could trigger a decline towards 1.3720–1.3760.

Factors that could influence USD/CAD movement:

• Today at 15:15 (GMT+3): ADP US non-farm employment change
• Today at 15:30 (GMT+3): US initial jobless claims
• Today at 15:30 (GMT+3): Canada trade balance

USD/JPY

Yesterday, USD/JPY buyers made another attempt to break out of the medium-term sideways range of 146.40–148.60. The test of 149.00 ended in a sharp pullback, sending the price back into the previously established corridor. It seems investors are holding off on fresh positions while awaiting new data.

Factors that could influence USD/JPY movement:

• Today at 17:00 (GMT+3): US ISM non-manufacturing PMI
• Tomorrow at 15:30 (GMT+3): US average hourly earnings
• Tomorrow at 15:30 (GMT+3): US non-farm payrolls and unemployment rate

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Markets

Core bonds entered calmer water after the sharp declines on Tuesday, driven by a spike in fears for unsustainable public finances. UK gilts were in markets’ crosshairs back then but outperformed yesterday. Yields eased up to 9 bps at the very long end of the curve. Shorter tenors lagged behind, weighed down by an overall hawkish appearance from BoE policymakers, including Governor Bailey, before UK parliament. It basically confirmed the central bank’s already slow easing pace – a quarterly 25 bps – is to shift into even lower gear. US yield changes varied between -2.3 (2-yr) to -6.5 bps (30-yr). Treasuries noticed the July JOLTS reports missing expectations. It came in at 7.18mln vs 7.38mln expected and from a downwardly revised 7.36mln in June. German bunds joined the overall move. Yields slipped 0.8-5 bps in a bull flattener. Japanese yields still shot up 7 bps in a catch-up move but JGBs are better bid this morning. Demand for a closely watched 30-year auction this morning certainly helped. Damage for the US dollar could have been bigger given the US yield moves. EUR/USD rebounded from the intraday lows to end the day around 1.166. The pair remains trapped within a tight sideways trading range. Since August it even narrowed further to just 1 big figure, give or take (1.16-1.17). Along with gilts came some (minor) GBP outperformance as well. EUR/GBP retreated from the 0.871 area to 0.8675. Calm returned to stock markets too. The likes of the Nasdaq rose 1%. That spills over into Asian dealings this morning, except in China (see below). The US dollar has a slight upper hand over most G10 peers going into another round of interesting economic data. The August ADP job report is due ahead of tomorrow’s official payrolls. Job creation is expected at 68k, a deceleration from July’s 104k. The US services ISM is also scheduled for release. The headline figure is seen at 51, picking up slightly from 50.1. From Tuesday’s manufacturing ISM and yesterday’s market reaction to (a lagging) JOLTS job report reveal a high sensitivity for the employment component (expected at 46.7 from 46.4). Downside surprises will further add to market bets for three consecutive rate cuts at each of the remaining 2025 Fed policy meetings and could pressure short-term US yields. The 2-yr rate is near first support at 3.6% with the 3.43%-3.5% area seen in the aftermath of Liberation Day serving as the next references. EUR/USD in that case has scope to move higher, be it within the established trading range.

News and views

China’s financial regulators are rumoured to introduce a number of cooling measures for the stock market. They include the removal of some short selling curbs and options to rein in speculative trading. Securities Regulatory Commission Chairman Wu Qinq pledged to consolidate the positive momentum of the market while promoting long-term value and rational investing. Policy officials turned skeptical about the speed of the rally of Chinese stock markets since early August. With the 2015 boom-bust in mind, they want to avoid steep losses especially for retail investors. Regulators have already drafted the nation’s financial institutions to help achieve that goal. Banks need to investigate the use of credit funds in stock markets or cut the leverage for margin traders while brokerages need to tone down their aggressive marketing campaigns. The main Chinese equity benchmarks correct 1% to 2% lower this morning. The Shanghai composite reached a new decade high at the end of August with the CSI 300 trading at best levels since early 2022 before the correction kicked in.

The Fed’s Beige Book, a survey of regional business contacts and a preparatory document for the FOMC meeting, showed little or no change in economic activity since the previous reporting period in most of the 12 Fed districts. Across districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices. Nearly all districts noted tariff-related price increases, with contacts from many districts reporting that tariffs were especially impactful on the prices of inputs. Interesting in light of Fed Chair Powell’s pivot in Jackson Hole: eleven districts described little or no net change in overall employment levels, while one district described a modest decline.

Daily Pivots: (S1) 198.47; (P) 199.10; (R1) 199.79; More...

Range trading continues in GBP/JPY and intraday bias stays neutral. With 197.84 support intact, further rise is in favor. Firm break of 200.26 will confirm resumption of whole rise from 184.35, and that from 180.00. Further rally should then be seen to 100% projection of 180.00 to 199.79 from 184.35 at 204.14. On the downside, however, break of 197.93 support should confirm short term topping, and turn bias to the downside for 195.01 support next.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

Daily Pivots: (S1) 172.40; (P) 172.85; (R1) 173.19; More...

Intraday bias in EUR/JPY stays mildly on the upside for retesting 173.87 high. Decisive break there will resume larger rally from 154.77, and target a retest on 175.41 key resistance. On the downside, however, break of 171.09 will turn bias to the downside for 169.69 support, and possibly below.

In the bigger picture, current rally from 154.77 is still tentatively seen as resuming the larger up trend. Firm break of 175.41 (2024 high) will confirm and target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. However, sustained break of 38.2% retracement of 161.06 to 173.87 at 168.97 will delay this bullish case, and probably extend the correction from 175.41 with another fall.

Daily Pivots: (S1) 0.8660; (P) 0.8685; (R1) 0.8699; More...

Intraday bias in EUR/GBP remains mildly on the upside, and further rise should be seen to retest 0.8752 resistance. Firm break there will resume whole rally from 0.8221. Next target is 0.8867 fibonacci level. For now, risk will stay on the upside as long as 0.8636 support holds, in case of retreat.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, further rise could still be seen to 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Nevertheless, sustained trading below 55 W EMA (now at 0.8513) will argue that the pattern has completed and bring retest of 0.8221 low.

Daily Pivots: (S1) 1.7790; (P) 1.7835; (R1) 1.7865; More...

EUR/AUD had another take on 38.2% retracement of 1.7245 to 1.8155 at 1.7807 but recovered quickly. Intraday bias remains neutral. On the downside, sustained break of 1.7807 should confirm that whole rise from 1.7245 has completed. Corrective pattern from 1.8554 should then be in its third leg. Further decline should be seen to 61.8% retracement at 1.7593. On the upside, break of 1.7932 resistance will retain near term bullishness and bring retest of 1.8155 resistance instead.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. Such pattern could extend further with another falling leg. But even in that case, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Uptrend from 1.4281 is expected to resume at a later stage.

Daily Pivots: (S1) 0.9366; (P) 0.9373; (R1) 0.9387; More....

EUR/CHF's recovery from 0.9317 is still in progress and intraday bias remains neutral. Outlook is unchanged at corrective pattern from 0.9218 might have completed with three waves up to 0.9452 already. Further decline is in favor as long as 0.9403 resistance holds. On the downside, below 0.9317 will target 0.9265 support first. Firm break there should resume larger fall to retest 0.9204 low. Nevertheless, break of 0.9403 will dampen this view and bring stronger rise back to 0.9452 resistance instead.

In the bigger picture, the down trend from 0.9204 (2018 high) might still be in progress considering that EUR/CHF is staying well inside the long term falling channel. However, with bullish convergence condition in W MACD, downside potential should be limited in case of another fall. Instead, firm break of 0.9660 resistance will be an important sign of medium term bullish trend reversal.

Daily Pivots: (S1) 1.1619; (P) 1.1650; (R1) 1.1693; More...

Intraday bias in EUR/USD remains neutral for the moment, as range trading continues. Further rise is in favor as long as 1.1573 support holds. Corrective fall from 1.1829 should have completed with three waves down to 1.1390. On the upside, above 1.1741 will bring retest of 1.1829 high first. Firm break there will resume larger up trend. However, sustained break of 1.1573 will dampen this view, and indicate that corrective pattern from 1.1829 is extending with another falling leg towards 1.1390 again.

In the bigger picture, rise from 0.9534 (2022 low) long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

Daily Pivots: (S1) 1.3365; (P) 1.3412; (R1) 1.3489; More...

Intraday bias in GBP/USD remains neutral for the moment. Overall outlook is unchanged that corrective pattern from 1.3787 is extending. Below 1.3332 will bring deeper pullback. But downside should be contained by 38.2% retracement of 1.2099 to 1.3787 at 1.3142. On the upside, break of 1.3549 resistance should resume the rebound from 1.3140 towards 1.3787 high.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3104) holds, even in case of deep pullback.