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Swiss Franc has come under heavy pressure since early August, with trade tensions driving much of the weakness. The US stunned markets last week by imposing a 39% tariff on Swiss imports, accusing Bern of failing to make “meaningful concessions” on trade. The duties, effective Thursday, will impact a broad swath of Swiss exports — including high-value goods like pharmaceuticals and luxury watches — which are heavily reliant on access to the US market.
Swiss officials have scrambled to Washington in a final attempt to prevent the tariffs from being implemented. President Keller-Sutter and Business Minister Parmelin arrived Tuesday, and a meeting with US Secretary of State Marco Rubio is scheduled for Wednesday. With no confirmed talks yet with US trade or commerce officials, hopes for a breakthrough might be fading, further weighing on the Franc.
CHF/JPY is reflecting this pressure technically, with the pair confirming a short-term top at 186.60 after breaking support at 183.19. Near-term outlook favors a deeper correction to (now at 180.79) and possibly below.
But strong support should emerge around 178 support zone, (61.8% retracement of 173.06 to 186.00 at 178.00 and 38.2% retracement of 163.83 to 186.00 at 178.29) to contain downside. Large up trend is expected to resume through 186.00 at a later stage, if tensions with Washington ease in the coming weeks.
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