USD/CHF experiences upward momentum, nearing a one-month high, as markets assess strong US labour data alongside a slight Swiss inflation rise. RSI is back above 50, and MACD is positive, suggesting potential for a break above the 100-day SMA, which may lead toward the upper end of the consolidation range.
On Thursday, USD/CHF trades around 0.7991, marginally higher than the Swiss Franc. US initial jobless claims increased to 208,000, slightly below the 210,000 expectation, while the trade deficit narrowed to $29.4 billion, significantly less than forecasted.
Swiss Inflation and SNB Policy
In Switzerland, inflation data stabilized with the Consumer Price Index unchanged in December. The annual inflation rate edged up to 0.1%, matching forecasts. Anticipations are that the Swiss National Bank will maintain interest rates, easing concerns about possible negative rates.
Technically, USD/CHF displays improving momentum, with RSI over 50 and MACD positive. Prices test the 100-day SMA near 0.7984, where a break could lead toward the 200-day SMA near 0.8070. Failing to surpass this level might expose USD/CHF to downside pressure, with key support near 0.7850.
The Swiss Franc (CHF) is considered a safe-haven currency. Its value depends on market sentiment, economic health, and actions by the Swiss National Bank. Swiss macroeconomic data and Eurozone monetary policy significantly influence CHF. Decisions by the Swiss National Bank focus on maintaining inflation below 2%, impacting CHF by influencing interest rates. Economic releases can significantly affect CHF valuation, with high economic growth benefiting its stability. Switzerland’s strong dependency on the Eurozone means that Euro monetary policies and economic conditions heavily influence the Swiss Franc.
Based on the current momentum, we are watching the USD/CHF pair closely as it pushes against its 100-day moving average. The divergence is clear: firm US labor data and a narrowing trade deficit from late 2025 are strengthening the dollar. Meanwhile, Swiss inflation remains minimal, giving the Swiss National Bank little reason to consider tightening its policy.
US Jobs Report and Dollar Sentiment
This bullish dollar sentiment was just reinforced by the latest US jobs report for December 2025, which showed the economy added a solid 215,000 jobs, beating expectations. Furthermore, the unemployment rate held steady at a low 3.8%, a figure consistent with a robust labor market. These statistics make it less likely for the Federal Reserve to consider rate cuts in the near term, adding to the dollar’s appeal.
For derivative traders, this situation suggests positioning for a potential breakout to the upside in USD/CHF. Buying call options with a strike price around 0.8000 could be an effective strategy to capitalize on a move higher. This approach allows us to participate in the potential rally while defining our maximum risk to the premium we paid for the options.
Looking back, the Swiss National Bank has a history of intervening when the franc becomes too strong, as we saw in the years leading up to the 2011 peg. While direct intervention isn’t currently expected, the franc’s strength since mid-2025 keeps the central bank in a cautious stance. This historical context provides a subtle floor for how low the USD/CHF might go, limiting the long-term appeal of bearish positions.
The key technical target is the 200-day moving average near 0.8070, which aligns with the top of the trading range we have been stuck in since August 2025. We could consider call options with expirations in late January or February to give this trade enough time to play out. If the pair breaks and holds above the 100-day average, confidence in reaching this upper target will grow significantly.
However, we must also manage the risk if the breakout fails. A rejection from the 100-day moving average could see the price fall back toward the 0.7850 support level. In that scenario, we could use put options to protect any long positions or to speculate on a move back to the bottom of the range.
