From Deflation Fears to FX Pullbacks: Your Mid‐Week Market Map

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FX Rocket Profits
September 10, 2025

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Dollar’s Comeback, China’s Deflation Woes & USD/CHF’s Pullback Play

Tuesday’s session was a study in market whiplash. The dollar started the day on the back foot as traders digested a historic 911,000 downward revision to U.S. payrolls and celebrated record highs in the Nikkei and Chinese yuan. But safe‑haven flows from fresh geopolitical tensions and a late‑session rise in U.S. yields flipped the script, sending the greenback higher into the close.

In Asia, China’s August CPI fell 0.4% y/y — a deeper drop than expected — keeping deflation concerns front and center. Core CPI’s modest rise to 0.9% offered a sliver of encouragement, but the data underscored weak domestic demand and fueled expectations for more stimulus. The Aussie caught a bid on the news, as traders bet Beijing will step up support.

Technically, USD/CHF is in the middle of a textbook pullback within its downtrend, bouncing from September lows toward broken channel support and key Fib levels. Whether this turns into a deeper retracement or a fresh leg lower will hinge on upcoming U.S. inflation data.

⚡Daily Broad Market Recap – September 9, 2025

  • Stocks hit fresh records in the U.S. despite a massive payrolls revision; gold touched $3,674 before easing to $3,628.

  • The dollar reversed early weakness on safe‑haven demand and higher yields, closing stronger against most majors except JPY.

  • Oil gained 0.6% on Middle East tensions and smaller‑than‑expected OPEC+ output hikes.

🔥China’s August CPI Falls Short of Estimates

  • CPI fell 0.4% y/y vs. -0.2% expected; PPI dropped 2.9% y/y, in line with forecasts.

  • Core CPI rose to 0.9%, its highest since Feb 2024, but still well below target.

  • Data reinforced deflation concerns and boosted stimulus expectations, lifting AUD across the board.

📊 USD/CHF’s Trend Pullback Opportunity

  • USD/CHF bounced from .7915 lows to .7975, testing broken channel support and the 38.2% Fib of September’s drop.

  • A push to .8000–.8040 is possible if buyers hold; rejection could resume the downtrend toward fresh lows.

This issue blends macro shifts with clean technical setups. From the dollar’s late‑day reversal and China’s deepening deflation risks to USD/CHF’s pullback zone, the themes are clear: sentiment can turn on a dime, and the best trades come from aligning with both the chart and the catalyst.

Happy Trading!

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