The USDCHF recently rose, breaking past important levels at 0.80628 and 0.8155. Support at 0.8102 is crucial for keeping buyers in control, with eyes on a potential breakout above 0.8155. The price pushed through resistance at 0.80628 and went beyond the 38.2% retracement level at 0.8102. This led to more buying, nudging the pair toward a swing area between 0.81468 and 0.81554, where selling pressure capped further gains.

Market Pullback Dynamics

Today, a pullback began as traders took profits, shifting momentum and signaling a correction. The decline halted around 0.8111, near the 38.2% retracement at 0.8102, which is now a key support level. If the price stays above this retracement level, buyers remain in control. However, a drop below could suggest a failed breakout, leading to setbacks and possible sell-offs among recent investors. If the pair rises above 0.8155, traders may set their sights on the 50% midpoint at 0.81732. The recent rise in USDCHF offers a clear opportunity, with the pair staying strong above the new support level at 0.8102. As long as it stays above this point, the trend is likely to continue upwards. The breakout past 0.8155 will be the next major test for sustained momentum.

Fundamental Divergence and Opportunities

This movement is backed by a growing policy gap between the US Federal Reserve and the Swiss National Bank. We’ve seen ongoing US inflation, with the latest Core CPI for June 2025 at 2.8%. This data keeps the Fed cautious about rate cuts, contrasting with Switzerland’s economic climate. The Swiss National Bank was among the first to cut rates, starting its easing cycle in March 2024. Currently, the SNB’s policy rate is at 1.00%, and futures markets suggest a nearly 70% chance of another rate cut this year to address slow growth. This divergence makes holding the US dollar more appealing than the Swiss franc. For derivative traders, consider buying call options with a strike price just above the next resistance level, around 0.8175. These options provide a leveraged opportunity to profit from an upward trend expected in the coming weeks, with limited risk in case of quick pullbacks. Alternatively, if you believe the 0.8102 support will hold, selling cash-secured put options below this level, such as at 0.8050, could be a smart strategy. This allows you to collect premium, betting that the pair won’t drop significantly. It’s a way to earn while waiting for the upward trend to resume. Keep an eye on the key level at 0.8102; a sustained drop below this level would change the current bullish outlook. Such a failure could indicate that the recent breakout was false, leading to a quick sell-off. Therefore, any long positions should have protective stops just below this crucial support. Next week, all attention will be on the upcoming US employment data. A strong jobs report would likely strengthen the Fed’s hawkish stance, giving a push for USDCHF to break decisively through 0.8155. Be prepared to act on this potential volatility. Create your live VT Markets account and start trading now.

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