The USDCHF is currently testing its 100-hour moving average at 0.7963. If it stays above this level, buyers are favored, but if it drops below, sellers gain an advantage. A disappointing Michigan consumer sentiment report has weakened the dollar, causing USDCHF to decline. The price briefly dropped to the 100-hour moving average before bouncing back, making it a key point for traders. This level is crucial for the upcoming week.

Swing Area and Moving Averages

Staying above the 100-hour moving average will keep focus on the swing area between 0.7986 and 0.7994. This area lines up with the 50% midpoint from September and the downward-moving 200-hour average. Previous breaks above the 200-hour average were short-lived, pulled back by weak jobless claims. Yesterday’s dip found support in the 0.7938-0.7947 range, halting the decline. Today’s trading has hovered around 0.7963 before climbing to face resistance at 0.7986, establishing clear short-term trading levels. Resistance is at 0.7986–0.7994, while a drop below 0.7963 would target support at 0.7938–0.7947. If it falls below this, the next support level is found between 0.7910 and 0.79209. The 100-hour moving average at 0.7963 is our key point right now. A sustained break below this level would indicate sellers are taking control, leading to opportunities for bearish trades. We are closely monitoring this level, as it will likely influence short-term momentum next week.

Fundamental Factors at Play

Recent weak Michigan consumer sentiment data is further pressuring the dollar. This matches this week’s U.S. inflation report for August 2025, showing a slight cooling in the headline CPI to 2.8%, which eases pressure on the Federal Reserve to tighten policy further. These factors suggest a weaker outlook for the dollar in the near term. For derivative traders, we should prepare for potential volatility if the 0.7963 support fails. Buying weekly put options with a strike near 0.7950 could be a smart move to position for a quick drop to the 0.7938 support zone. This strategy offers a way to profit from expected downside momentum with defined risk. Meanwhile, the Swiss Franc is gaining strength as a safe-haven asset amid rising geopolitical tensions in the South China Sea. The Swiss National Bank has maintained a steady policy rate of 1.5% for several months, with Swiss inflation now controlled at 1.4%. This stable environment makes the Franc an attractive option compared to a weakening dollar. We recall the aggressive rate hikes of 2022 and 2023, which makes the current economic softness in the U.S. feel more significant. Back then, any sign of strength led to Fed hikes, while now, signs of weakness encourage bets on a dovish shift. This change in market sentiment is a major factor impacting the USD/CHF pair today. If the pair fails to maintain above 0.7963, we may consider bear put spreads targeting a move toward the 0.7910 area. This strategy allows us to profit from a decline while capping initial costs. The crucial trigger is a confirmed break of that important moving average. On the flip side, if support at 0.7963 holds firm and the price rises above 0.7994, we should adjust our outlook. A rise above that level would negate immediate bearish sentiment, suggesting a look at short-term call options to capitalize on a potential bounce near the monthly highs. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now