The USDCHF is testing key resistance levels, particularly the 0.8047 point, while 0.8017 serves as support to help forecast market trends. After Powell’s speech last Friday, the currency pair dropped significantly, falling below the 100- and 200-hour moving averages and slipping through the 0.8040–0.8047 range. Despite extending below the 0.8017 low of an important swing area, sellers couldn’t maintain their downward momentum. Currently, the price is back within the swing area but is having difficulty breaking through the 0.8040–0.8047 resistance zone, which aligns with earlier swing points and the 50% midpoint from July’s rally.

Key Support And Resistance Levels

Staying below this zone keeps a downward trend. The 0.8017 level is significant, and if the price drops below the 61.8% retracement at 0.8010, it may open up selling opportunities towards the 0.7986–0.7994 range. In summary, the market is in a tug-of-war while it remains within the “red box.” A move above 0.8040 to 0.8047 could push sellers back, whereas dropping below 0.8017 and 0.8009 might strengthen their position. The current uncertainty in USDCHF, sitting between 0.8017 support and 0.8047 resistance, suggests potential energy is building. This creates an opportunity for traders to benefit from rising volatility, such as through a long straddle, anticipating a large move once this balance is disrupted. This strategy allows traders to profit from a breakout in either direction without needing to guess the outcome of this tight consolidation.

Market Strategy and Outlook

The sharp decline following the Jackson Hole speech on Friday, August 22, 2025, highlights renewed uncertainty about the Federal Reserve’s direction, especially considering that recent US CPI data indicated inflation at 3.2%. Meanwhile, Swiss inflation remains low at 1.5%, giving the Swiss National Bank more room to maneuver. We remember the surprise rate cuts in 2024 that weakened the franc significantly. This policy difference is contributing to the current price tensions. If sellers regain control and push the price below the 0.8017 level, we may consider buying put options targeting around 0.7990. The one-month implied volatility for USDCHF has increased to 7.9% from 6.5% earlier this month, indicating that the options market is anticipating a potential move. A clean break of the 0.8010 Fibonacci level would confirm our bearish positions. On the other hand, if the price sustains a move beyond the 0.8047 resistance, it would suggest that sellers are losing strength and buyers are gaining momentum. In this case, buying call options would be the right move, as this would negate the recent bearish sentiment. We will closely watch the upcoming US jobs report on September 5th as a potential catalyst for a bullish breakout. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now