USD/CHF continues to rise as the US Dollar strengthens due to positive trade deal news. US jobless claims decreased to 228K, aiding broader USD strength, while technical resistance and support levels stand at 0.9050 and 0.8900, respectively.

The US Dollar’s momentum stems from mixed economic signals and trade optimism, contrasting with a weaker Swiss Franc amid risk-on sentiment. A trade announcement with the UK initially boosted markets, albeit tempered by a 10% tariff on UK goods, potentially limiting economic impact.

US Dollar Index Performance

The US Dollar Index trades near 100.00, buoyed by positive data, as US jobless claims dropped, highlighting market resilience. In contrast, the Bank of England reduced its interest rate, fortifying USD appeal due to the yield differential.

Switzerland faces uncertainties due to global trade issues, while the Swiss National Bank’s cautious stance and data suggest low inflation pressures. These factors have weighed on the CHF amidst current market conditions.

Technically, USD/CHF tests resistance levels, while the MACD indicates further gains potential. Longer-term moving averages indicate a cautious outlook. The USD/CHF movement is supported by US economic data and dovish European central bank signals, with upcoming data and geopolitical events potentially affecting volatility.

With the US Dollar maintaining its upward path against the Swiss Franc, we see that recent data has only solidified the current direction of this pair. Weekly jobless claims in the US dipped to 228,000, which hints that the labour market is weathering broader economic concerns with more resilience than expected. US economic strength tends to breathe life into the greenback, especially when paired with lukewarm responses from other central banks. In this case, policymakers in the UK and Switzerland lean more cautious, especially with the latter facing ongoing global trade uncertainties.

What’s important in the short term stems from the relative yield advantage. When US rates remain higher and other regions signal hesitation or even easing, that differential becomes more attractive for those looking at directional bets. As Powell’s team in the US holds firm with rates while regional banks, like the SNB, retain more defensive postures, the Dollar continues to find support across broader FX markets.

Technical Analysis and Positioning

On a technical footing, we find ourselves pressing against 0.9050, a level that has previously acted as a turning point for the pair. Any clear and sustained break above this could trigger further upside momentum, especially given confirmation from the MACD suggesting more room to run. However, support near 0.8900 has held firmly, and unless pierced with conviction, provides a floor for pricing in the immediate term.

From our perspective, short-dated derivatives tied to this pair reflect volatility clustering within this 150-pip range. This implies market participants are watching for a breakout rather than expecting immediate trend reversals. With volatility relatively subdued but prone to sharp bursts sparked by geopolitical or policy-driven headlines, any options exposure should account for the risk asymmetry around upcoming events.

Though trade noise often adds an element of confusion, recent announcements involving the UK–US dynamic are worth noting. While headlines promoted cooperation, the imposition of a 10% tariff complicates the sense of optimism—effectively keeping upside for global risk assets in check. This balance has dampened the Franc’s defensive demand, especially in absence of domestic inflation concerns which often act as a sell trigger for the SNB.

Looking into positioning, medium-term market structures seem to be aligning with a bullish narrative for the USD/CHF. But the presence of longer-term moving averages acting as overhead resistance reminds us that the move higher is not without friction. Momentum may be with the Dollar, but the follow-through depends on the next set of economic indicators and how policymakers choose to react.

Meanwhile, volatility premiums around upcoming central bank meetings remain relatively grounded—marking a potential opportunity for structured positions looking to benefit from either continued range behaviour or an eventual directional breakout. We remain attentive to the next surprise in inflation prints or employment figures, given their capacity to quickly shift interest rate expectations and with them, momentum in this pair.

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