The USDCHF pair has been gradually falling since testing resistance earlier in the Asian session. It briefly climbed to 0.79948, but sellers took over, pushing it down. Swiss National Bank President Martin Schlegel mentioned that negative interest rates would only be considered in rare situations because they negatively impact savers and pension funds. The policy rate remains at zero after recent cuts, with officials careful about further reductions as they monitor U.S. tariffs and domestic inflation. Schlegel pointed out the limited options for responding to new shocks and mentioned that markets expect rates to stay stable until 2026.

Technical Analysis of USDCHF

Technically, the pair’s decline continued into the U.S. session, dipping below a crucial range of 0.7938 to 0.79471, which keeps sellers in control. This sets a downside target at 0.7910–0.79209, with further drops possibly reaching the 2024 low of 0.78722, a level not seen since 2011. If the pair rises above 0.7947, it could halt sellers from pushing further down. A jump above the post-employment reaction low of 0.79555 would also lower sellers’ hopes for additional declines. The US dollar is notably weak against the Swiss franc, bringing the USD/CHF pair to its lowest since July 2025. The drop below the significant technical floor of 0.7947 indicates that sellers are in control for now, supported by a cautious stance from the Swiss National Bank.

Market Trends and Strategies

The SNB is keeping its policy rate at zero, with little desire for more cuts through 2026. This stands in contrast to the Federal Reserve, which has lowered its benchmark rate twice in 2025 as U.S. inflation eased to 2.8%. The widening interest rate gap is boosting the franc’s appeal. Derivative traders can benefit from this situation by employing strategies that capitalize on further declines in USD/CHF. Buying put options with strike prices below the current 0.7930 level, such as 0.7900 or the more ambitious 0.7875, could effectively leverage the trend. These positions would become profitable if the pair continues to fall toward the 2024 lows. The next significant target is the 2024 low of 0.78722, a key psychological level marking a point not seen since major market changes in 2011. Unlike that time, when the SNB actively opposed a strong franc, today’s policy appears to accept this strength. Data from the Commitments of Traders report indicates that large speculators have increased their net long positions in the franc by over 15% since August 2025, suggesting institutional support for this outlook. However, we should keep a close eye on the 0.7947 to 0.7955 area as a critical risk point. If the pair moves above this level consistently, it could indicate that the recent drop was a false signal, potentially trapping sellers and suggesting a reduction in bearish momentum, necessitating a reassessment of short-term bearish options strategies. Create your live VT Markets account and start trading now.

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