The USDCHF fell today due to disappointing US Empire manufacturing data. This push brought the pair down to a low of 0.7945, sparking new buying interest. This level sits within a swing area that stretches from 0.79382 to 0.79471. This zone has previously attracted buyers and provided support once more, leading to a slight bounce.

Key Reference Point

The range from 0.79382 to 0.79471 is essential for market players: – If the price drops below 0.79382, it could lead to more declines, potentially reaching 0.7910 to 0.79209. – On the upside, short-term resistance is found at 0.79556, which is a former swing low from September 5, close to today’s Asian session low. A steady move above 0.79556 might shift focus upward, specifically toward the 100-hour moving average at 0.79698. Right now, the market is stuck between these key levels, with traders waiting for a clear break to decide the next trend. The US dollar is weakening against the Swiss franc due to the New York Empire State Manufacturing Index, which reported a disappointing -8.5. This suggests the US economy is slowing down, raising concerns about the Federal Reserve’s next steps and putting pressure on the dollar. For those expecting further US economic decline, the 0.79382 level is crucial. A break below this level would indicate a stronger downward trend. A good strategy could be to buy put options with a strike price around 0.7925, aiming for profit-taking in the 0.7910-0.7920 range.

Market Positioning and Strategy

On the other hand, the Swiss National Bank has already cut its policy rate to 1.00% earlier in 2025. Any surprising strength in upcoming US data could lead to a sharp reversal. Traders betting on a dollar rebound should look for a move above 0.79556. Buying call options with a strike near 0.7970 would be a sensible approach to target the 100-hour moving average. The market is currently signaling uncertainty, caught between contrasting central bank views. Reflecting on similar periods of consolidation in late 2024, implied volatility typically decreased before a big breakout. This environment might be perfect for strategies like selling a short strangle or an iron condor to collect premium while the pair stays between key support and resistance levels. Overall, price movement is confined within a narrow range of about 0.7940 to 0.7970. We will be watching the upcoming US jobless claims data later this week for the next catalyst. Until one of these key levels breaks, taking large directional positions carries significant risk. Create your live VT Markets account and start trading now.

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