The USD/CHF has found support at 0.7955 after reaching a peak close to 0.8020 against the Swiss Franc. The US Dollar has been rising since late December, but current technical indicators show weakening momentum. Recent bearish pressure from tensions within the US government and the Federal Reserve has eased. Traders are now looking ahead to the US CPI report to influence their decisions regarding the US Dollar.

Current USD/CHF Analysis

The USD/CHF is currently at 0.7977, having bounced back from a low of 0.7955. The price pattern resembles an expanding wedge, which often indicates a possible decline. The MACD is slightly below zero, and the RSI is around 50, suggesting no clear direction. Support is positioned at 0.7955, with a potential drop to 0.7900 if this level fails. On the upside, resistance is at 0.7985, which could hinder progress towards reaching the 0.8020 high and the wedge peak of 0.8035. A table shows currency percentage changes, revealing that the US Dollar is strongest against the Japanese Yen. A heat map illustrates the USD’s stance against various currencies, highlighting shifts in the forex market. This analysis comes from Guillermo Alcala, who studied communication sciences at the Universidad del Pais Vasco. The information is not investment advice, and FXStreet is not liable for errors or losses.

Historic Parallels and Trading Strategies

The US Dollar is currently seeking direction against the Swiss Franc, similar to how it was this time last year. We are anticipating important US Consumer Price Index (CPI) data, which will likely influence the market in the coming weeks. This situation is reminiscent of January 2025, when the market also paused ahead of the inflation report. In January 2025, the USD/CHF was trading within a bearish ascending wedge pattern and found support at the 0.7955 level. After the CPI data showed a slight drop in inflation, the pair broke that support and declined in the following weeks. This historical context is useful for understanding the current market. Today, the pair is trading at about 0.8850, but the market’s indecision feels similar to that earlier period. The Relative Strength Index (RSI) is around the neutral 50 mark, showing a lack of commitment from both buyers and sellers, echoing the technical situation from early 2025. This suggests we are at another important point, waiting for a fundamental catalyst. The upcoming CPI data is critical. Forecasts predict a drop in year-over-year core inflation to 2.8%. If the number is lower, it could increase expectations of a Federal Reserve rate cut in March, which would likely weaken the dollar. Conversely, the Swiss National Bank has been more cautious about signaling rate cuts, indicating a possible divergence in monetary policy. Given the uncertainty and the chance of a significant price move, traders might think about buying put options with a strike price below the current support of 0.8800. This strategy could be profitable if last year’s bearish price action repeats after the CPI release. For those anticipating a significant price swing but unsure of the direction, a long straddle or strangle option strategy could be used to benefit from the expected rise in volatility. Create your live VT Markets account and start trading now.

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