The US dollar was little changed against the Swiss franc on Friday, holding above 0.7830 after failing near 0.7900 a day earlier. Risk sentiment improved after Axios reported a memorandum of understanding between the US and Iran to extend the ceasefire for 60 days, although it still awaits President Donald Trump’s signature, easing demand for the safe-haven dollar.
Supportive US PCE Price Index data kept expectations of a Fed rate rise in play, but the effect on USD was tempered by geopolitical relief, while Switzerland’s KOF Leading Indicator showed a marginal April uptick with limited market impact. USD/CHF traded at 0.7839 within a downward channel; the 4-hour RSI sat around 43 and the MACD histogram showed widening red bars. Bears are watching support above 0.7800, with further downside levels near 0.7760 and the channel base at 0.7755. Resistance is seen at 0.7900, then around 0.7930, ahead of early-April highs above 0.8000.
Policy Divergence and Options Strategies
We see the US Dollar trading in a tight range against the Swiss Franc around 0.9050 today. A recently announced major trade deal is improving risk sentiment, which typically weighs on the safe-haven dollar. This is creating a tug-of-war for the currency pair as markets digest conflicting signals.
The dollar’s strength comes from expectations that the Federal Reserve will remain on hold. Recent US Core CPI data for April came in at a stubborn 2.8%, keeping any thoughts of near-term rate cuts off the table. This policy divergence from other central banks is a key factor supporting the USD.
Meanwhile, the Swiss National Bank faces a different picture with domestic inflation holding low at just 1.4% year-over-year. The SNB already surprised markets with a rate cut in March 2026, and we believe another cut could be coming this summer. This makes holding Swiss Francs less attractive compared to the higher-yielding dollar.
Given this fundamental backdrop, we are looking at options strategies that profit from a gradual rise in USD/CHF. A bull call spread is an attractive, risk-defined way to position for this potential upside over the next several weeks. This involves buying a call option at a lower strike price and selling another at a higher strike price to finance the position.
Historical Context and Chart Levels
We have seen this pattern before during the 2022-2024 period. Aggressive Fed rate hikes combined with a more cautious SNB led to a sustained rally in the currency pair. A similar, though less dramatic, divergence in monetary policy appears to be setting up again.
On the charts, immediate resistance is seen near the 0.9150 mark, a level that capped the pair last week. A decisive break above this could open the door for a test of the psychologically important 0.9200 level. Any pullbacks will likely find initial support around the 0.9000 handle.
