USDCHF is currently moving between the 100-bar and 200-bar moving averages on the 4-hour chart. The pair has a key intraday pivot point between 0.7986 and 0.7994. Earlier this week, USDCHF rose above the 100-bar moving average and held that level, except for a brief dip on Wednesday that quickly reversed. On Wednesday and Thursday, the price struggled to maintain a position above the swing area of 0.80388 to 0.8055, remaining under the 200-bar moving average.

Current Trading Range

Today, USDCHF is slightly lower, trading in a neutral zone between the 100-bar moving average at 0.7970 and the 200-bar moving average at 0.8067. Traders are watching the pair test the swing area of 0.7986–0.7994 in early U.S. trading. If the price drops below the 0.7986–0.7994 range, it could move lower, targeting the 100-bar MA at 0.7970 and the weekly low at 0.7944. If this support holds, traders may shift their focus back to the swing high at 0.8017, with a chance to revisit the 0.80388–0.8055 zone. Breaking out of the 100–200 MA range could signal the next major move. Traders are looking for this important decision point.

Trading Opportunities

Resistance and support levels are crucial, particularly at 0.80388–0.8055 for resistance and 0.7994–0.7986 for support. For derivative traders, this tight range suggests low implied volatility, which creates an opportunity. We see this as a chance to sell options strangles, earning premiums while the market remains steady within this range. The goal is to prepare for a volatility spike when the price breaks out. While the technical outlook is neutral, the fundamental aspect isn’t, which should influence our decisions. U.S. inflation stays high at 3.5%, keeping the Federal Reserve cautious, while Swiss inflation is much lower at 1.4%, leading their central bank to cut rates to 1.50%. The widening interest rate gap favors the U.S. dollar in the long run. Thus, we think the price will likely break out to the upside. The quick reversal after the Fed chair’s headlines shows the market’s sensitivity to policy changes, a likely catalyst for pushing prices past upper resistance. A strong move above 0.8067 would signal us to close short volatility positions and increase long bets. However, we must acknowledge the franc’s historical role as a safe-haven currency. Any unforeseen global risk event could prompt a flight to safety, pushing the pair below the 0.7970 support. To hedge our optimistic view, we can purchase inexpensive out-of-the-money put options for portfolio insurance. With the current market situation, we are selling puts below the 0.7942 swing area to benefit from solid support and low volatility decay. Simultaneously, we are gradually buying call options with strike prices above 0.8055. This allows us to profit from the current sideways market while preparing for the expected upward movement. Create your live VT Markets account and start trading now.

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