The USDCHF has been moving downward since yesterday’s US session, nearing the important swing area of 0.7986 to 0.7994. Sellers pushed the pair down to 0.7993, but buyers stepped in to defend this support level, leading to a reversal and rise in the hours that followed. This rebound was fueled by better-than-expected U.S. initial jobless claims and a stronger GDP revision, which helped lift the dollar. As a result, USDCHF climbed back above the 50% midpoint of its trading range since the July 1 low and broke through the 0.8017 to 0.8023 swing zone. This raises questions about whether this rebound is just a short-term correction or the start of a longer rally.

Volatility and Moving Averages

Recently, major currency pairs, including USDCHF, have seen increased volatility. Over the last three to four weeks, the pair has been trading around the 100- and 200-hour moving averages, making it hard to determine a clear direction. Despite this, the overall trend is still downward, as indicated by the consistent downward slope of the 100-hour moving average. Looking ahead, the next resistance level is the 100-hour moving average at 0.80356. If the pair surpasses this level, it may encourage buyers to continue the rebound. However, if it fails, sellers could regain control, driving the pair back toward previous swing lows. We are observing the USDCHF bounce off the key 0.7990 support level, which is significant following the recent downward trends. This rebound was supported by strong U.S. economic data, leading us to wonder if the month-long bearish trend is losing strength. The move has brought the pair back into the middle of its recent trading range.

US Economic Data and Policy Divergence

The trigger for this was yesterday’s U.S. initial jobless claims, which came in at a solid 225,000, better than the expected 240,000. Additionally, the upward revision of second-quarter GDP to 1.7% suggests that the U.S. economy remains stronger than many anticipated. This dollar strength is a key factor in the current reversal. This contrasts sharply with the Swiss National Bank, which has had a dovish stance throughout 2025. They made a proactive rate cut in June 2024, and with Swiss inflation staying below 1.5%, there’s little incentive for them to change course. This growing policy difference between a strong U.S. economy and a cautious Swiss stance supports a higher USDCHF. For those who believe this rise marks the start of a new trend, buying short-dated call options with a strike price above the 100-hour moving average at 0.8035 could be a solid strategy. Given the recent market volatility, using options allows for defined-risk exposure to a potential breakout. This strategy would be beneficial if strong U.S. data continues to fuel the dollar’s rise in the weeks ahead. On the other hand, if the USDCHF fails to break and hold above the 0.8035 resistance level, sellers may take control again. Traders who expect a return to the broader downtrend might consider buying put options to target a move back down to the 0.7990 lows. This would be a bet that the recent strength is merely a temporary correction in a larger downward trend. It’s also important to consider that the pair could remain stuck in a range, a pattern we’ve seen over the last four weeks. The constant fluctuations around key moving averages indicate uncertainty from both buyers and sellers. For traders anticipating this volatility to continue, selling an options strangle could be an effective strategy to profit from sideways price action. Create your live VT Markets account and start trading now.

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