USD/CHF traded flat on Thursday, holding just above 0.7800. Market focus was on the outcome of US President Donald Trump’s China visit amid safe-haven demand linked to the Iran stalemate and higher US Treasury yields.
Trump and China’s President Xi Jinping held a two-hour meeting. Trump reported positive talks, while Xi said bilateral ties were stable and that views were exchanged in depth.
Swiss economic data were limited this week, while US inflation numbers pointed to a stronger-than-expected impact from April’s energy shock. This increased expectations of Federal Reserve rate rises in the second half of the year, supporting US yields and the Dollar.
On the 4-hour chart, the pair was trading in a falling wedge pattern. RSI showed bullish divergence, with the RSI near 56 and MACD lines slightly positive.
A move above the May 4 high and wedge top at about 0.7845 would confirm a bullish reversal. Further resistance levels were cited near 0.7930, while support levels were noted at 0.7760 and 0.7740, then near 0.7670.
Looking back to this time in 2025, we saw a bullish setup for the US Dollar against the Swiss Franc, with the pair trading around 0.7800. The key drivers then were expectations of Federal Reserve rate hikes fueled by an energy-driven inflation shock and geopolitical uncertainty. That analysis correctly identified a potential rise, as the pair broke out of its falling wedge pattern later that month.
Today, the fundamental picture has shifted significantly, even as USD/CHF trades much higher near 0.8550. The most recent US CPI report for April 2026 showed inflation cooling to 2.8%, leading the market to price in a 60% chance of a Fed rate cut by the end of the year. In contrast, the Swiss National Bank has signaled a firm stance on holding its policy rate steady, creating a potential policy divergence that now favors the franc.
From a derivatives standpoint, this evolving macro environment suggests positioning for a potential downturn or consolidation in USD/CHF. The recent rally appears to be losing steam, with the daily Relative Strength Index showing bearish divergence as the pair struggles to break key resistance at 0.8600. Implied volatility is currently low, making options strategies relatively inexpensive.
Considering this, traders could look at buying July 0.8500 put options to speculate on a move lower over the coming weeks. A more risk-defined strategy would be a bear put spread, such as buying the July 0.8500 put and simultaneously selling the July 0.8350 put. This would lower the initial cost of the trade while capturing profits if the pair drops towards the 0.8350 level.
