The USDCHF pair is currently ranging after a recent selloff. Traders are waiting for the US CPI report to determine the next move. Since the Non-Farm Payroll (NFP) report, the USD has weakened as expectations for rate cuts have grown, with market pricing now anticipating 57 basis points of cuts by the year’s end, up from 35 basis points before.

US CPI Focus

All eyes are on the upcoming US CPI report. Recent comments from the Federal Reserve suggest a rate cut might happen in September. For the USDCHF pair, daily technical analysis shows it is trading above a key support level around 0.8050. Buyers are looking at the 0.84 level, while sellers are hoping for a drop to new cycle lows. On the 4-hour chart, a minor upward trendline supports a bullish outlook, with a strong focus on the support zone. The 1-hour chart indicates minor support at 0.8090, hinting at buyer interest for a rally toward 0.84, while sellers want to push below that level to extend the pullback. Today’s US CPI report could outweigh technical indicators. Other important upcoming reports include US PPI and Jobless Claims on Thursday, and Retail Sales and Consumer Sentiment on Friday. It’s a good idea to keep an eye on Federal Reserve comments after the CPI report for additional insights. Since the July 2025 Non-Farm Payrolls report, which showed weak job growth at 150k, the dollar has weakened. Currently, the USDCHF pair is just above key support. The market has quickly priced in two rate cuts from the Federal Reserve before the year ends, keeping the pair within a tight range as we await the US Consumer Price Index (CPI) data for direction. We are particularly focused on today’s CPI release for July 2025, crucial for the Fed’s decisions. Core inflation has been decreasing from 3.4% earlier this year. If the report shows another soft reading below the expected 3.0%, it could ensure a rate cut in September. If this happens, we may consider buying USDCHF put options with a strike price below the crucial 0.8050 support level to aim for new lows.

Possible Trading Strategies

Conversely, if the inflation data is unexpectedly high, it could disrupt the market’s expectations and cause a quick dollar rally. Traders might then look to sell cash-secured puts at the 0.8050 support or buy call options targeting the 0.8400 level. This strategy relies on the belief that strong technical support will hold during a dollar rebound. The Swiss National Bank has paused its easing cycle for much of 2025, keeping its policy rate at 1.00%. This stability means the Swiss franc’s movements will heavily depend on the dollar’s next actions. Political developments, such as ongoing US tariff talks, add some risk but are not the primary concern at this time. Given the uncertainty, an options straddle—purchasing both a call and a put option expiring in September 2025—might be a smart way to trade the expected volatility from the CPI report. Recently, implied volatility on USDCHF options has risen, indicating that the market is preparing for significant price changes. This strategy allows for profit, regardless of the price direction. After today’s CPI, we’ll keep a close watch on Thursday’s Producer Price Index and jobless claims data. These upcoming reports, along with Friday’s retail sales figures, will be vital in shaping the inflation outlook. Any deviations from the expected trends could yield new opportunities in the derivatives market. Create your live VT Markets account and start trading now.

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