The US Dollar Index (DXY) stabilized on Wednesday after hitting a new weekly low of 99.30 on Tuesday. This drop followed the ADP Employment Change report, which showed 11,250 job layoffs in one week, putting extra pressure on the USD/CHF pair.
Bearish Trend Indicators
The USD/CHF pair is now below its 200-day Exponential Moving Average of 0.8217, indicating a bearish trend. The 14-day Relative Strength Index suggests that the ongoing correction could lead to further declines toward 0.7800 and potentially back to the 2011 low of 0.7580. However, if the pair surpasses the August 1 high of 0.8170, it could signal a recovery toward previous highs.
The steady decline in USD/CHF highlights the Swiss Franc’s strength as a key factor. The Swiss National Bank (SNB) has indicated it will keep interest rates steady, contrasting with a slowing US economy. This policy difference supports a continued bearish outlook for the pair in the coming weeks.
Recent data from early November 2025 shows Swiss inflation rising to 1.8% year-over-year, approaching the SNB’s 2% target. This justifies their decision not to cut rates. In contrast, the latest US jobs report revealed that only 95,000 jobs were added in October, falling short of expectations and raising concerns about the US economy’s strength. This confirms the weakness indicated by the recent ADP employment data.
Technical Trading Strategies
Since the pair is trading below its 200-day moving average, the bearish trend is confirmed. Traders might consider buying USD/CHF put options with strike prices close to the 0.7829 support level. An expiration date set for mid-to-late December 2025 would allow enough time for the downward trend to potentially continue.
For a more risk-defined strategy, a bear put spread could be effective. This involves buying a put option at a higher strike, such as 0.7900, and selling another put at a lower strike, like 0.7800. This strategy lowers the initial cost while still allowing for profit from a moderate decline.
It’s worth noting the historical context from the summer of 2011 when economic uncertainty pushed the pair toward 0.7580, as investors turned to the Franc for safety. Although we are not facing the same crisis, the current slowdown in the US could drive more investment toward the Swiss Franc. Hence, those historical lows remain a relevant long-term possibility if key support levels break.
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