USD/CHF Trading Insights

Before a speech by Federal Reserve Chair Jerome Powell, the US Dollar Index remained stable around 99.00. Minutes from the Federal Open Market Committee suggested that policy easing may occur due to rising employment risks. The USD/CHF pair is staying above its 20-day Exponential Moving Average of 0.7975, indicating a positive trend. However, the Relative Strength Index shows that volatility is decreasing. If the pair climbs, it could exceed its August 1 high of 0.8170, with chances of reaching June highs. On the other hand, if it falls below the September 17 low of 0.7829, we might see a drop towards 0.7800. The US Dollar plays a significant role in global transactions, making up over 88%. It is influenced by the Federal Reserve’s policies; typically, quantitative easing weakens the Dollar, while tightening strengthens it. As of today, October 9, 2025, the USD/CHF is near a monthly high of about 0.8040, driven by a solid US Dollar Index holding around 99.00. Everyone is watching Fed Chair Jerome Powell’s speech today, as it could determine market direction for the coming weeks. The market appears ready for a big move, but its direction remains unclear. The Federal Reserve is expected to hint at more rate cuts for the rest of 2025. This prediction is backed by weak September Non-Farm Payrolls data, which showed only 95,000 new jobs—far below expectations. Coupled with recent CPI data revealing inflation at a 2.1% annual rate, this gives the Fed space to ease its policies. If Powell confirms this dovish approach, it could weaken the US Dollar.

Trading Strategy and Expectations

Regarding the Swiss National Bank (SNB), we do not expect them to reduce interest rates into negative territory again. The SNB had only moved away from negative rates in September 2022. With Swiss inflation steady at around 1.5%, there is little reason for them to return to such a drastic measure, providing support for the Swiss Franc. Given the current market situation, where price action is coiled and the RSI suggests significant movement is on the horizon, we recommend using options to capitalize on this anticipated volatility. A long straddle, which involves buying both a call and a put option, allows traders to benefit from a sharp price movement post-Powell’s speech, regardless of the direction. The current low implied volatility makes this strategy appealing. For those optimistic about the market, a surprisingly strong tone from Powell could result in the pair rising. In this case, we would consider buying call options with a strike price above the August 1 high of 0.8170, supporting the ongoing bullish trend, which remains above the 20-day moving average. Alternatively, if Powell confirms the market’s dovish expectations, the dollar’s recent strength may sharply reverse. In this scenario, we would shift to buying put options, aiming for a break below the September 17 low of 0.7829. This strategy is based on the belief that Fed rate cuts are likely before the end of the year. Create your live VT Markets account and start trading now.

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