USDCHF: Safe Haven or Short Candidate? A Comprehensive Mid-to-Long-Term Analysis
The USDCHF pair recently experienced a sharp correction of over 140 pips from its daily highs, signaling the start of a decisive phase. Is it just a technical rebound or the beginning of a more structural bearish trend?
- Macro in Motion: When the Dollar Stumbles, the Franc Strengthens
In recent weeks, the narrative around the U.S. term premium has gained traction: concerns about U.S. fiscal policy and waning demand for Treasuries are raising red flags among investors. This scenario tends to favor safe-haven currencies like the Swiss franc.
As the chart shows, in periods of declining equity markets and rising yields, both the EUR and CHF tend to benefit from flight-to-safety flows, while the dollar may come under pressure.
- Positioning: CHF Among the Most Shorted Currencies
Recent data reveals that the EUR and CHF are among the most shorted currencies in the G10. This kind of positioning increases the risk of a short squeeze — sharp upward corrections triggered by dollar-negative events.
At the same time, however, the CHF has also become one of the most bought G10 currencies, drawing interest from institutional players who are starting to take profits or reduce exposure.
- Flows and Positioning: Between Banking Demand and Speculative Selling
Positioning data shows that the Swiss franc is receiving inflows from banks, while simultaneously seeing outflows from hedge funds and institutional investors — creating a split scenario.
This duality makes USDCHF highly sensitive to both macro shocks (U.S. fiscal policy, geopolitics) and technical movements.
- Technical Analysis: Volume, Elliott Waves, and Bearish Trend
On the technical side, the chart outlines a well-defined descending structure.
- The Elliott Wave count suggests the end of a bearish impulsive phase and the completion of a possible ABC correction.
- Prices are once again under pressure, testing the support at 0.8260, with potential continuation toward 0.8040 and 0.75.
- The volume profile highlights a high-concentration trading zone between 0.83 and 0.84, acting as a magnet and resistance area.
- Moving averages are all positioned above the current price, confirming the prevailing bearish trend.
- Oscillators (RSI and MACD) show a loss of relative strength, with momentum still negative.
- Seasonality: What Does History Tell Us?
Seasonal trends for USDCHF are also noteworthy.
So far, 2025 (blue line) is the worst seasonal year since 2020, with a year-to-date performance already down more than -9%. Only 2020 (-8.8%) and 2023 (-9%) show similar behavior. In contrast, years like 2024 (+6.7%) and 2021 (+3.4%) were far more favorable to the dollar.
📌 This strengthens the notion that the current environment is driven by structural weakness in the greenback rather than by purely technical factors.
Conclusion
The overall picture for USDCHF suggests a cautious stance on the dollar, with:
- Macro factors favoring the Swiss franc as a safe haven.
- Extreme but potentially reversing market positioning.
- A technical structure allowing for further downside in the medium term.
- Unfavorable seasonality for the USD.
Key Technical Levels to Watch
Major Supports: 0.8040 – 0.7500
Technical Resistances: 0.84 – 0.8478 – 0.85
Long-Term Trendline: Still descending and intact
