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Painting new lows last Friday, gains in today’s session keep the dollar-franc exchange above the key level of 0.8000 - at least for now.

Currently trading around ~$0.80698, recent developments on the Federal Reserve’s autonomy on monetary policy and potential action by the SNB continue to dominate USD/CHF headlines.

USD/CHF: Key takeaways from today’s session

• Boasting reasonable gains in Monday’s session, despite a public holiday in the United Kingdom, USD/CHF trades ~0.46% higher today, as markets adjust expectations for Federal Reserve monetary policy
• Otherwise, questions continue surrounding Federal Reserve independence from the US central government, with President Trump attempting to fire board governor Lisa Cook
• Having reminded markets that intervention remains a real possibility, the SNB remains poised to take action should the franc stage a runaway strengthening versus the dollar

USD/CHF: Dovish fed commentary at Jackson Hole spells trouble for US dollar

Put simply, markets are increasingly certain of a September rate cut, in no small part because of dovish Federal Reserve commentary during last week’s Jackson Hole Symposium.

"With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance"

Jerome Powell speaking at the JHS, August 22nd, federalreserve.gov

While markets have consistently predicted Fed rate cuts in the remainder of 2025, confirmation from Jerome Powell himself now have markets overwhelmingly predicting a rate cut of 25 BPS in the upcoming decisions September 17th.

CME FedWatch, 26/08/2025

As for USD/CHF pricing, markets would do well to acknowledge how much the dollar has fallen versus the franc this year despite the Federal Reserve's best efforts to tighten monetary policy, especially when compared to the SNB.

As such, any suggestion that the Federal Reserve will lower rates will negatively affect the dollar and introduce selling pressure in USD/CHF markets, a phenomenon seen just last Friday.

USD/CHF: Dollar finds support as Trump firing bid meets a dead-end

While building anonymity between the Republican party and the Federal Reserve is not a hot topic, the latest developments are perhaps the most significant for dollar-franc markets.

@realDonaldTrump, TruthSocial, 25/08/2025

Sharing the above letter yesterday on his social media platform of choice, TruthSocial, President Trump has made his intentions to fire Governor Cook clear, citing alleged mortgage fraud.

While matters of fraud amongst government officials would not typically be of such interest to financial markets, the move reignites discussion whether any US government should have the power to fire Federal Reserve officials, considering political independence is a core tenet of the institution.

Supposing Trump successfully removes Cook from office and overcomes various legal hurdles, an interesting precedent will be set, especially considering that Trump has been clear in his dislike for Powell and his policy of higher interest rates.

Regarding USD/CHF price action, any developments suggesting that Trump can wrangle more control of the Federal Reserve and its employees and, therefore, appoint governors who favour an aggressive lowering of interest rates will likely introduce some dollar-franc selling pressure.

As such, the next few days remain crucial, especially with USD/CHF hovering around the key level of 0.80000.

USD/CHF: SNB ready to intervene to halt CHF strengthening

Having already strengthened significantly compared to the dollar in the first half of the year, the trusted tool of currency intervention by the SNB remains a real possibility should dollar-franc continue to its decent.

Already trading around multi-year lows and citing the competitiveness of imports, USD/CHF downside may be capped in the near-term, considering the SNB’s clear commitment to intervention where appropriate.

USD/CHF, OANDA, TradingView, 27/08/2025

Like other FX pairs, USDJPY has been held in a tight range for the past two full weeks.

There is a lack of clarity regarding the outlook for US cuts due to contradicting data, supplemented by Markets having digested a more balanced/dovish tone from Powell rather than a fully dovish one (from a more balanced/hawkish tone regarding the impact of tariffs).

The question remains: Will there be only 2 cuts this year? This would not change much to the FED's quarterly outlook from previous meetings.

Markets are also awaiting more information regarding who will be the next FED board member. Reactions to the US Dollar have been minimal regarding the firing of Lisa Cook, a board member (hence a continuous voter).

The Bank of Japan has been waiting for the Federal Reserve to cut rates to reduce the huge rate differentials that have hurt the Yen throughout the past 3 years.

Luckily for the BoJ, a basis trade unwind in July 2024, combined with US Dollar weakness, has gradually naturally reduced the Yen's relative weakness. However, it is still at relative lows against its European peers.

Let's examine USDJPY multi-timeframe technicals to see if the daily USD rally is enough for the pair to break out of its range and establish its boundaries.

USDJPY multi-timeframe technical analysis

USDJPY Daily Chart

USDJPY Daily Chart, August 27, 2025 – Source: TradingView

The most volatile FX pair has been held into a 1,000 to 1,900 pip range for the past 18 days, a prolonged consolidation compared to the usual.

Despite all of the headlines throughout the year, nothing really changed compared to the fundamentals of the year-beginning – Markets are still awaiting for a concrete change to the main rates for both the FED and the Bank of Japan, leading to some mostly rangebound action since May.

The range has tightened quite a lot however this month, located between 146.80 (lows) to 148.70 (range extremes), with the price action located between the 50 and 200-Day Moving averages acting as key boundaries.

As a matter of fact, they will be acting as key indicators for a more concrete breakout – expect rangebound action as long as prices remain within these boundaries.

Let's discover where they stand just below.

USDJPY 4H Chart

USDJPY 4H Chart, August 27, 2025 – Source: TradingView

The 4H timeframe allows to spot the current price action heading higher as the current US Dollar buying is bringing the pair above the 200 4H-period MA in a higher-low formation, supported by a short-timeframe upward trendline.

A higher timeframe Head and Shoulders could also be into play but its long-shape may not create enough clarity to make the pattern valid – It is still noteworthy but hold about a 35% chance of materializing further.

Key trading Levels for USDJPY:

Resistance Levels

• 148.78 last Friday highs
• May range extremes from 148.70 to 149.50 (daily MA 200 in confluence)
• 149.00 200-Day MA Key range resistance

Support Levels

• Pivot at the 148.00 zone (acting as immediate support)
• 147.00 50-Day MA Key range support
• 146.50 mid-range and immediate support (Daily MA 50 in confluence)
• 145.00 psychological support

USDJPY 1H Chart

USDJPY 1H Chart, August 27, 2025 – Source: TradingView

Looking even closer, bulls will have to push harder to break the last Friday highs as price action is stalling at the high of 148 pivot Zone, a key short-term pivot.

Particularly as markets lack further data and fundamentals to break out from rangebound price action, the short-term outlook is more rangebound than breakout-prone.

Look at the top in the 1H RSI, if buying goes further, it will add to more chances of testing the range extremes around the last Friday highs.

Safe Trades!

EURUSD has fallen back below 1.1600, quickly losing Friday’s momentum and forming its third lower local peak since the beginning of July. Trade flows and expectations of weaker growth due to tariffs could bring the pair back to the lows of the end of last year or push it below parity.

🟦 Blue line – ECB–Fed rate differential

• This measures the gap between the European Central Bank’s main refinancing rate and the U.S. Federal Funds rate.
• When the blue line rises, it means the ECB’s rate is moving higher relative to the Fed’s, narrowing or reversing the U.S. rate advantage.
• When it falls, the Fed’s rate advantage is widening.

🔴 Red line – EURUSD exchange rate

This dynamic contrasts with the news agenda, according to which the differential between the ECB and Fed key rates will soon begin to shift in favour of the former, as the ECB is close to completing its cycle of rate cuts and the Fed is ready to resume its easing.

But there is a perfectly reasonable explanation: trade flows. The EURUSD gained momentum sharply at the beginning of the year as US companies and consumers rushed to buy before tariffs were raised. Now we are at the point of the reverse process, when imports will be below the norm of recent years. Moreover, long-term fundamental factors are coming into play, such as suppressing production in Europe and supporting it in the US. The same shift from the dollar to the euro occurred in 2017, when the first trade conflicts began, and continued until March 2018, when tariffs were introduced.

The eurozone can counter this trend through further rate cuts or government financial incentives. Due to chronic budget deficits, the former is more likely. The Fed’s rate is now 2.2 percentage points higher than the ECB’s, above previous turning points of 2.7 points in 1999, 2.5 in 2006 and 2.4 in 2019.

This approach is supported by rising inflation in the US versus deteriorating activity in Europe. Fundamental factors alone could push EURUSD to last December’s lows or even below parity, which we last saw in September 2022.

However, traders in the market are dealing with a reality in which Washington is increasing pressure on the Fed, calling for a sharper rate cut. In extreme cases, this threatens to repeat the 33% rally in EURUSD between November 2005 and March 2008. In this case, the single currency could fall to the 1.40 level, which has not been reached for the last 11 years.

Nevertheless, we consider political interference in monetary policy a risk. The main scenario is based on a balance of fundamental forces, which are currently bearish for EURUSD.

Daily Pivots: (S1) 146.97; (P) 147.45; (R1) 147.92; More...

Intraday bias in USD/JPY remains neutral for the moment. On the downside, firm break of 146.20 will resume the fall from 150.90. Also, that would argue that rebound from 139.87 has completed as a corrective move to 150.90. Deeper fall should be seen to 142.667 support for confirmation. On the upside, above 148.76 will bring another rise to retest 150.90 instead.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 0.8016; (P) 0.8045; (R1) 0.8063; More….

Intraday bias in USD/CHF remains neutral for the moment. Another fall is in favor as long as 0.8103 resistance holds. Below 0.7999 will target a retest on 0.7871 low. However, break of 0.8103 will turn bias to the upside, and target 0.8170, to extend the corrective pattern from 0.7871.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 1.3444; (P) 1.3469; (R1) 1.3504; More...

Intraday bias in GBP/USD stays neutral for the moment. Overall, price actions from 1.3787 high are seen as a corrective pattern. On the upside, break of 1.3594 will resume the rebound from 1.3140 to retest 1.3787 high. Firm break there will resume the larger up trend. However, break of 1.3389 will bring deeper fall towards 1.3140 to extend the corrective pattern.

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 1.3073) holds, even in case of deep pullback.

Daily Pivots: (S1) 1.1607; (P) 1.1636; (R1) 1.1670; More...

EUR/USD breached 1.1582 support briefly but cannot sustain below the level yet. Intraday bias stays neutral first. On the upside, above 1.1741 will resume the rally from 1.1390 to retest 1.1829 high. Firm break there will extend larger up trend. However, decisive break of 1.1582 will extend the corrective pattern from 1.1829 with another downleg, and target 1.1390.

In the bigger picture, rise from 0.9534 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.

Dollar firmed again today in what remains a subdued week for markets, with no top-tier European economic data releases so far and little central bank commentary on the docket. The summer lull has left trading ranges tight, and with nothing scheduled during the US session, conditions are expected to remain muted.

For the week so far, Dollar continues to hold the top spot in FX performance, followed by Loonie and Aussie. At the other end, the Euro has been the weakest, trailed by Yen and Kiwi, while the Swiss Franc and Sterling sit in the middle of the pack.

Attention in Europe turned to trade developments. According to Bloomberg, the European Union is preparing to fast-track legislation to remove tariffs on U.S. industrial goods. The move comes after Washington insisted that lower duties on EU autos and parts would only take effect once Brussels acted to eliminate industrial tariffs more broadly.

Currently, European cars and auto parts face a steep 27.5% U.S. tariff. While the U.S. and EU agreed last month on a framework that would lower tariffs on nearly all EU exports to 15%, US President Donald Trump stressed that autos were excluded until the EU presented legislative changes. If Brussels delivers by month-end, the tariff rate on cars would be retroactively reduced to 15% effective August.

Still, the German Chambers of Industry and Commerce, DIHK, urged caution. In its August survey, firms stressed the need for a consistent strategy from EU policymakers, arguing that the bloc must not compromise its “economic sovereignty” for short-term trade concessions.

Negotiations between Washington and Brussels remain ongoing. While the July framework and subsequent joint statement offered progress, significant uncertainty persists over tariff treatment for metals and cars, leaving exporters wary. DIHK added that the EU should be ready to use countermeasures if needed, while continuing to push for the eventual abolition of tariffs deemed inconsistent with WTO rules.

In Europe, at the time of writing, FTSE is flat. DAX Is down -0.08%. CAC is up 0.44%. UK 10-year yield is down -0.024 at 4.721. Germany 10-year yield is down -0.018 at 2.712. Earlier in Asia, Nikkei rose 0.30%. Hong Kong HSI fell -1.27%. China Shanghai SSE fell -1.76%. Singapore Strait Times rose 0.04%. Japan 10-year JGB yield rose 0.001 to 1.627.

German Gfk consumer confidence falls to -23.6 on job fears

Germany’s GfK Consumer Sentiment index for September dropped to -23.6 from -21.7, falling short of expectations at -21.2. It was the third consecutive monthly decline, with NIM’s Rolf Bürkl describing sentiment as “definitely in the summer slump.”

The key driver was a sharp fall in income expectations as worries about job security intensified. Registered unemployment remained just below three million in July, but analysts expect that mark to be breached in August. Consumers’ expectations of rising unemployment have reached their highest level of the year.

Australia CPI jumps to 2.8%, highest in a year, rules out September RBA cut

Australia’s monthly CPI spiked to 2.8% yoy in July, well above expectations of 2.3% yoy and up sharply from 1.9% yoy in June. It was the highest annual inflation rate since July 2024, breaking several months of easing price pressures. Core measures also firmed, with CPI excluding volatile items rising from 2.5% yoy to 3.2% yoy and trimmed mean jumping back from 2.1% yoy to 2.7% yoy, a pace last seen three months ago.

The result adds to concern that inflation is proving sticky, though July’s data, as the first month of the quarter, is skewed toward goods and offers less insight into services inflation than subsequent months.

For the RBA, the print is a warning sign but not a trigger for panic. Policymakers will want to wait for the full quarterly inflation update before adjusting course. Today’s data nonetheless rules out a September cut.

Barring a significant deterioration in the labor market or other downside shocks, the more realistic timeline for the next rate move remains November.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1607; (P) 1.1636; (R1) 1.1670; More...

EUR/USD breached 1.1582 support briefly but cannot sustain below the level yet. Intraday bias stays neutral first. On the upside, above 1.1741 will resume the rally from 1.1390 to retest 1.1829 high. Firm break there will extend larger up trend. However, decisive break of 1.1582 will extend the corrective pattern from 1.1829 with another downleg, and target 1.1390.

In the bigger picture, rise from 0.9534 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.

Market Overview

The crypto market capitalisation has increased by almost 2% to $3.86 trillion over the past 24 hours due to the traction of major altcoins such as Ethereum (+4%), XRP (+3%), Solana (+7.8%), and Dogecoin (+4.9%). Crypto enthusiasts were expecting a different altcoin season, but it is still worth noting their outperformance relative to the first cryptocurrency.

Bitcoin gained 1% to $111K during the day after spending most of Tuesday forming the basis for a rebound on dips below $110K. This is an important indicator of interest in buying on dips, which probably encouraged more risk-tolerant altcoin buyers. The former is also lagging the stock market, where the S&P500 is on the verge of historic highs, and the Nasdaq100 is 1.8% below its historic high.

News Background

The Bitcoin derivatives market points to pessimistic sentiment, as market participants are actively buying put options.

New investors are selling Bitcoin at a loss. In this way, the market is getting rid of ‘weak hands’ and preparing a support base for future growth, notes analyst Crazzyblockk.

GLJ Research head Gordon Johnson said that BTC is at risk of a 65% collapse due to a reduction in dollar liquidity in the US financial system for the first time since 2022. Only the Fed’s abandonment of quantitative tightening (QT) and a return to new quantitative easing (QE) can remedy the situation.

According to Bitfinex, the altcoin season will not start until new cryptocurrency ETFs are approved. It is only expected to begin at the end of the year. The SEC is currently reviewing more than 70 applications to launch altcoin-based ETFs.

Citi warns that paying interest on stablecoin deposits could cause a massive outflow of deposits from the banking system. A similar situation was observed during the money market fund boom in the United States in the 1980s.

The CRO token, associated with Crypto.com’s Cronos blockchain project, jumped 25% on Tuesday after the announcement of a major partnership with Trump Media. The parties will create Trump Media Group CRO Strategy, a digital asset management company focused on acquiring CRO.

The Australian dollar is in negative territory on Wednesday. In the European session, AUD/USD is trading at 0.6468, down 0.40% on the day.

Australian CPI jumps to 2.8%

Australia's CPI for July surprised on the upside, jumping to 2.8% y/y. This followed a 1.9% gain in June and was above the market estimate of 2.3%. The spike in inflation, the highest level since July 2024, was driven by a sharp increase in electricity prices due to the end of government electricity rebates for many households. The trimmed mean, a key gauge of core CPI, rose to 2.7% in July from 2.1% in June.

The surprise jump in inflation has dampened expectations for a September rate cut. The money markets have reduced the probability of a rate cut to 22%, down from 30% before the inflation release.

Despite the hot inflation report, the Reserve Bank is expected to continue its easing cycle, with a 61% probability of a cut in November. The central bank remains very concerned about inflation but is also focused on employment, with the labor market showing signs of weakening.

The minutes of the RBA's August meeting said that upcoming rate decisions would depend on the data. The RBA meets next on September 19 and there are three key releases in September prior to the meeting - inflation, GDP and employment. The RBA has surprised the markets before and if these upcoming releases show a drop in economic activity or inflation, the RBA could respond with a rate cut next month.

Trump says he has fired Fed Governor

The nasty feud between the Federal Reserve and Donald Trump has taken another twist, as the President said he had removed Fed Governor Lisa Cook due over charges that she made false statements on mortgage applications. The Fed says that Trump does not have authority to fire Cook. This latest spat further undermines the credibility of the US and could hurt the US dollar.

AUD/USD Technical

• AUD/USD has dropped below support at 0.6486 and is testing 0.6476. Below, there is support at at 0.6460
• There is resistance at 0.6502 and 0.6512

AUD/USD 4-Hour Chart, August 27, 2025