USD/CHF snapped a four-day winning run and traded near 0.7990 in European hours on Thursday, while remaining within an ascending channel on the daily chart. The pair is holding above the nine-day and 50-day Exponential Moving Averages, and the 14-day Relative Strength Index is around 65, pointing to firm upside momentum as prices press towards nearby resistance.
The next test sits at the 0.8000 barrier, close to the channel top near 0.8030, with a further cap at the six-month high of 0.8042 set on March 31. If that area gives way, attention shifts to the region around the near yearly high of 0.8171 reached in August 2025. On the downside, support is seen at the nine-day EMA of 0.7948, then the channel base near 0.7900, and the 50-day EMA at 0.7877, with a deeper pullback exposing the three-month low of 0.7761 from May 8.
Derivative Strategies Amid Upward Momentum
We see the current upward momentum in USD/CHF as an opportunity for bullish derivative plays. We are considering buying call options with strike prices around 0.8000 to 0.8050, targeting a move toward the top of the ascending channel. This strategy would allow us to profit from the strong trend identified in the technical setup.
This view is supported by diverging central bank policies, which typically drive this currency pair. Recent data shows U.S. inflation holding steady at 2.8%, keeping the Federal Reserve from cutting rates, while Switzerland’s inflation remains much lower at 1.2%, giving the Swiss National Bank reason to remain dovish. This policy gap strengthens the US dollar relative to the Swiss franc.
Risk Management and Key Levels
However, we are mindful that the Relative Strength Index is near 65, suggesting the pair is becoming overbought. To manage this risk, we are looking at buying some out-of-the-money put options with a strike price near the 0.7900 support level. This provides a hedge that will limit potential losses if the price unexpectedly reverses and breaks down.
Historically, moves like this can accelerate once key levels are broken. We saw a similar pattern in the second half of 2025 before the pair pushed toward its yearly high. A firm break above the 0.8042 resistance could trigger another rapid advance as traders with short positions are forced to buy back, adding fuel to the rally.
