5. USD/CHF Hovers at 0.7700 as Traders Shrug Off Goolsbee, Eye PCE

Traders' Opinions

Summary:

The US Dollar is posting modest gains against the Swiss Franc, hovering just above the 0.7700 handle, but the pair remains locked in a tight 70-pip range.

BUY USDCHF

EXP

TRADING

0.77200

Entry Price

0.80000

0.75800

0.77077 +0.00083 +0.11%

0.0

Pips

Flat

0.75800

Exit Price

0.77200

Entry Price

0.80000

The currency markets are caught in a state of suspended animation, and nowhere is this more evident than in the US Dollar against the Swiss Franc. As of Wednesday’s trading session, the USD/CHF pair is posting characteristically modest gains, drifting back above the 0.7700 figure . Yet, to call this a breakout would be a dramatic overstatement. The pair remains stubbornly entrenched within a narrow 70-pip trading band, oscillating between 0.7660 and 0.7730 . This sideways crawl feels like a market catching its breath, consolidating the steep losses incurred in late January when the greenback shed more than 5% against the safe-haven Franc.

The price action this week has been a masterclass in range-bound trading. With much of Asia observing the Lunar New Year holidays, liquidity has evaporated, leaving major currency pairs drifting within familiar waters . The real catalyst for directional momentum, however, is slated for later today when the Federal Reserve releases the minutes from its January policy meeting .

Investors will be scouring the document for any nuance regarding the central bank’s easing calendar. At the January gathering, the Fed held its benchmark rate steady in the 3.5%-3.75% range, and current market pricing suggests a status quo until at least June—which would incidentally be the first meeting under the leadership of new Chairman Kevin Warsh . However, the narrative is far from settled. We received a verbal nudge from Chicago Fed President Austan Goolsbee on Tuesday, who acknowledged that "several" rate cuts could be on the table this year, provided inflationary pressures continue their moderating trend . It is the kind of data-dependent caveat that keeps traders guessing, and frankly, keeps the Dollar from establishing a clear trajectory.

The minutes, therefore, are just the opening act. The main event will be the curtain call later this week with the release of US Gross Domestic Product (GDP) and the Personal Consumption Expenditures (PCE) Price Index . If those data points show an economy that is cooling faster than anticipated, the "multiple cuts" scenario will gain serious traction, weighing on the Dollar. Conversely, sticky inflation could push those June expectations further into the distance.

Across the Atlantic, the fundamental picture for the Swiss Franc is becoming increasingly difficult to ignore. The domestic economic calendar has been quiet, but the hangover from last week’s Swiss Consumer Price Index (CPI) report lingers . Inflation remains stagnant at 0.1%, clinging desperately to the lower end of the SNB’s 0-2% target range . This anemic price pressure is a stark reminder of the deflationary risks that haunt the Swiss economy.

SNB Chairman Martin Schlegel has been vocal on the matter, recently stating that the current combination of near-zero inflation and a 0% interest rate is "not an easy situation for monetary policy" . While he has emphasized that the hurdle for reintroducing negative rates is higher than it was in the past, he has also notably refused to take the option off the table . In fact, he acknowledged earlier this year that it is "well possible" we could see inflation dip back below zero in 2026 .

This persistent deflationary undertow acts as an anchor on the Franc. While the Franc typically strengthens during geopolitical strife—a dynamic we saw play out amid talks regarding Iran and Ukraine this week —its medium-term appreciation potential is capped by the very real prospect of the SNB resuming a negative rate policy to weaken its currency and boost imports. As Pantheon Macroeconomics noted, further appreciation of the Franc "could deepen imported deflation," creating a vicious cycle the SNB is desperate to avoid .

Technical Analysis

From a technical perspective, USD/CHF remains entrenched in a well-defined range structure on the daily chart, though recent price action suggests a potential transition from distribution to recovery following an aggressive downside break. The pair had been consolidating for several months between the 0.8100 resistance zone and the 0.7850 support band. However, a sharp impulsive selloff in early February drove price decisively below the lower boundary of this range, triggering a liquidity sweep beneath 0.7650 before buyers stepped in aggressively.

The 0.7600–0.7650 zone now represents a critical structural support area. The strong bullish rejection from this level, marked by long lower wicks and consecutive recovery candles, signals demand absorption and potential exhaustion of immediate selling pressure. While the broader structure remains fragile after the breakdown, the inability of bears to sustain price below 0.7650 suggests a developing base.

The 0.7850 region, previously range support, has now transitioned into near-term resistance. A sustained recovery above 0.7850 would signal a reclaim of broken structure and open the door toward the 0.8000 psychological level. Beyond that, the major supply zone between 0.8080 and 0.8120 remains the primary upside objective, aligning with the upper boundary of the prior consolidation range. A decisive daily close above 0.8100 would mark a broader structural shift back to bullish conditions.

Conversely, failure to build acceptance above 0.7750–0.7800 would keep the pair vulnerable. A renewed break below 0.7600 would invalidate the recovery thesis and expose 0.7500 as the next downside target, potentially accelerating bearish continuation.

Momentum conditions favor stabilization rather than continuation lower. The sharp decline appears climactic, and the subsequent consolidation with higher short-term lows indicates accumulation behavior. While the broader trend preceding the range was bearish, the current structure suggests a corrective rebound toward prior breakdown levels before any larger directional commitment.

Overall, USD/CHF is attempting to transition from breakdown to recovery, with 0.7850 serving as the key pivot that will determine whether this move evolves into a full structural reversal or remains a corrective bounce within a broader bearish framework.

TRADE RECOMMENDATION

BUY USD/CHF

ENTRY PRICE: 0.7720

STOP LOSS: 0.7580

TAKE PROFIT: 0.8000

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