Yesterday, the USDCHF fell to new lows for 2025, dropping below 0.78714. Today, the pair has been fluctuating around this level, moving slightly above and below yesterday’s low. The pair reached its lowest point since September 2011, hitting a 14-year low of 0.78544. After this drop, the market entered a consolidation phase, leading to a slight bounce back.

Consolidation Phase

This bounce briefly pushed USDCHF above the 100- and 200-bar moving averages on the 5-minute chart. However, it hit a wall near 0.78784, causing the price to trade sideways within a tight 16-pip range. The current range is between 0.78621 and 0.78784, leaving traders searching for a clearer direction. Longer-term charts are being analyzed to understand these 14-year lows, while shorter-term charts are looked at for momentum signals. The significant drop below 0.78714 confirms a strong bearish trend for USDCHF, reaching levels we haven’t seen in 14 years. After such a big move, this consolidation period is a chance to prepare for the next push downward, not an end to the trend. Small rebounds toward the old low could be seen as opportunities for further downside positioning. This trend is backed by differing central bank policies. The US Federal Reserve is now expected to cut rates by the end of the year, following lower inflation figures of 2.8% in August 2025. Meanwhile, the Swiss National Bank has signaled no plans to stop its fight against inflation, attracting safe-haven flows into the franc amid slowing global growth. This mix of a dovish Fed and a hawkish SNB creates strong headwinds for this pair.

Trading Strategies

For those trading options, the high implied volatility makes outright put buying costly, but it also suggests the potential for another significant drop. We should consider bearish strategies like put spreads to reduce entry costs while still profiting from a continued fall toward the 0.7800 level. This way, we can stay active without paying too high a premium amidst the current uncertainty. In the short term, we should wait for a clear break from this narrow range. A decisive close below the new low at 0.78544 would trigger adding to short positions in futures or CFDs. Until then, the market remains balanced, and starting large new positions in this choppy environment is risky. We must also be cautious as the franc strengthens, remembering the extreme actions taken by the Swiss National Bank in 2011 to weaken their currency when it rose too quickly. While a repeat is unlikely, the risk of verbal or actual intervention from the SNB increases with each new low. We should keep this risk in mind and use stop-losses to protect our positions from sudden policy changes. Create your live VT Markets account and start trading now.

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