Switzerland\u2019s CPI rose 0.5% year on year in June, easing from 0.6% in May and matching the market consensus. On a month-on-month basis, CPI was flat at 0% versus a 0.2% increase previously, and it undershot forecasts for a 0.1% rise. In currency trading, USD\/CHF was 0.08% lower at 0.8088.<\/p>\n
CPI is a primary gauge of inflation and feeds into SNB policy expectations, with firmer readings tending to temper prospects of rate cuts while softer data can bolster the case for easing. On technicals, USD\/CHF remained above the 20-period Bollinger middle band and the 100-day MA, while RSI stood at 62.8. Support levels were seen around 0.8035, then near 0.7908 and 0.7880, while resistance was indicated around 0.8160, with additional reference to the 0.8030 area.<\/p>\n
The June inflation data, which landed right at the 0.5% market expectation, confirms that price pressures in Switzerland are continuing to cool down. This steady disinflation reinforces the Swiss National Bank’s (SNB) current policy path. For us, this soft reading solidifies the case for a weaker Swiss franc in the near future.<\/p>\n
We see this increasing the chances of another SNB interest rate cut at the next meeting in September 2026. The SNB has historically acted pre-emptively against low inflation, as it did when it became the first major central bank to cut rates back in March 2024. Today\u2019s data suggests that dovish stance will continue, especially with inflation well within their target range.<\/p>\n
This policy contrasts sharply with the United States, where recent data shows core PCE inflation remains elevated near 2.8%, keeping the Federal Reserve on hold. This growing interest rate difference between the two countries makes holding the US dollar more attractive. This policy divergence is a primary driver for a stronger USD\/CHF pair.<\/p>\n
Therefore, we believe the most effective strategy over the coming weeks is to position for a higher USD\/CHF rate. We are considering buying call options on the pair with a strike price near 0.8150 to capitalize on the expected upward move. This strategy provides defined risk while allowing us to profit from the ongoing bullish momentum.<\/p>\n
The technical outlook aligns with this fundamental view, as the pair maintains its strength above the key support level of 0.8035. As long as USD\/CHF holds above this mark, our bullish bias remains firm. Our initial target is the resistance area around 0.8160, where a breakout would signal a continuation of the uptrend.<\/p>\n\n\n\n