USD/CHF is on the rise, approaching a one-month high as markets evaluate strong US labor data along with a small increase in Swiss inflation. The RSI has climbed back above 50, and the MACD shows positive momentum, hinting at a possible breakout above the 100-day SMA, which could push prices toward the top of the current range. On Thursday, USD/CHF is trading around 0.7991, slightly stronger against the Swiss Franc. US initial jobless claims rose to 208,000, just below the expected 210,000, while the trade deficit narrowed to $29.4 billion, much lower than anticipated.

Swiss Inflation and SNB Policy

In Switzerland, inflation data remained steady with the Consumer Price Index unchanged in December. The annual inflation rate ticked up to 0.1%, in line with forecasts. It is expected that the Swiss National Bank (SNB) will keep interest rates unchanged, reducing worries about potential negative rates. From a technical perspective, USD/CHF shows improving momentum, with the RSI over 50 and the MACD in positive territory. Prices are testing the 100-day SMA around 0.7984; a breakout could lead to the 200-day SMA near 0.8070. If it fails to break this level, USD/CHF may face downward pressure, with key support at 0.7850. The Swiss Franc (CHF) is seen as a safe-haven currency. Its value is influenced by market sentiment, economic health, and actions from the Swiss National Bank. Swiss economic data and Eurozone monetary policy play a big role in the CHF’s performance. The SNB aims to keep inflation below 2%, and this focus affects CHF by influencing interest rates. Strong economic growth can improve CHF’s stability, while Switzerland’s reliance on the Eurozone means that changes in Euro monetary policies heavily impact the Swiss Franc. Given the current momentum, we are closely observing USD/CHF as it approaches its 100-day moving average. The contrast is clear: strong US labor data and a shrinking trade deficit are boosting the dollar, while Swiss inflation remains low, reducing reasons for the Swiss National Bank to tighten its policy.

US Jobs Report and Dollar Sentiment

The positive sentiment for the dollar has been reinforced by the latest US jobs report for December 2025, which showed a solid addition of 215,000 jobs, exceeding expectations. Additionally, the unemployment rate held steady at a low 3.8%, indicating a strong labor market. This data makes it less likely for the Federal Reserve to consider rate cuts soon, further enhancing the dollar’s attractiveness. For derivative traders, this scenario suggests a potential upside breakout in USD/CHF. Buying call options with a strike price around 0.8000 could be a smart strategy to benefit from a rise in prices. This approach allows traders to participate in potential gains while limiting risk to the premium paid for the options. Historically, the Swiss National Bank has intervened when the franc gets too strong, as seen before the 2011 peg. While no direct intervention is expected now, the franc’s strength since mid-2025 keeps the SNB cautious. This context provides a subtle support for how low USD/CHF can go, making bearish positions less appealing long-term. The main technical target is the 200-day moving average near 0.8070, aligning with the upper end of the trading range we’ve been in since August 2025. We could consider call options with expirations in late January or February to allow enough time for this trade to develop. If USD/CHF breaks and stays above the 100-day average, confidence in reaching this upper target will increase significantly. However, we must manage the risk if the breakout doesn’t happen. A rejection at the 100-day moving average may cause prices to retreat toward the 0.7850 support level. In that case, we could use put options to safeguard any long positions or speculate on a move back toward the lower end of the range. Create your live VT Markets account and start trading now.

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