USD/CHF plummets following PCE data
Source Fxstreet
- USD/CHF took a downturn in Friday’s session, plummeting to 0.9016, after slightly rising to 0.9070 earlier in the session.
- Following US inflation figures coming in line with market expectations, markets may be anticipating a less aggressive Fed stance.
- The potential for rate cuts in September has increased slightly.
The USD/CHF pair is trading lower following the release of the latest US inflation data on Friday. This change came in despite inflation figures, signaled by the Personal Consumption Expenditures (PCE) Price Index, holding steady at 2.7% YoY in April which matched market expectations.
On the other hand, the Core PCE Price Index, excluding volatile food and energy prices, observed a 2.8% YoY rise, consistent with the analyst's estimate. What seems to be weakening the USD is the lower-than-expected monthly variation of 0.2% which was below the 0.3% expected. The odds for easing by the Federal Reserve (Fed), however, remained mostly unchanged, except for a slight increase in the likelihood of the first-rate cut occurring in September. Those probabilities remain low for June and July.
USD/CHF technical analysis
In the daily analysis, the Relative Strength Index (RSI) has plunged into negative territory, indicating a momentum shift that favors sellers for the time being. Simultaneously, the Moving Average Convergence Divergence (MACD) displays red bars, pointing toward a growing bearish momentum.
USD/CHF daily chart
The USD/CHF seems to have lost some of its sheen from earlier in the week, when it stayed above the 20, 100, and 200-day Simple Moving Averages (SMAs). This previous positioning was a strong indicator of a bullish trend, with market dominance leaning towards buyers. However, following the recent downturn, the pair has lost its position above the 20-day SMA at 0.9095, indicating a less positive short-term outlook.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
