The US dollar edged lower against the Swiss franc on Tuesday, with USD/CHF trading at 0.7946 as markets weighed cautious optimism over a potential US-Iran agreement against positioning ahead of the Federal Reserve’s decision. President Donald Trump said at the G7 that talks with Tehran had moved to a “second stage”, while reports referenced a framework involving the release of $24bn in frozen Iranian assets in exchange for toll-free navigation through Hormuz. Attention then turns to Wednesday, when the Fed concludes its first policy meeting under Chair Kevin Warsh, with the interest-rate decision and updated economic projections due.
Price action kept a mildly bearish near-term tone, with a possible Head & Shoulders formation in focus. The RSI has drifted back towards the mid-40s, while the MACD remains marginally negative. Traders are watching support between 0.7900 and 0.7930, including 0.7930 (Monday’s low) alongside the neckline near 0.7915, with a measured objective around 0.7845; below that, the June 4 and 5 lows are cited near 0.6870. On the upside, resistance sits at 0.7960–0.7970, and a break higher would shift attention to 0.8013.
Fundamental And Macroeconomic Overview
We are seeing the US Dollar soften against the Swiss Franc, with sellers testing a crucial support zone between 0.8900 and 0.8920. Easing trade tensions between the US and the European Union are currently limiting the dollar’s appeal as a safe-haven asset. However, widespread caution ahead of this week’s Federal Reserve meeting is keeping the pair from falling further.
The Fed is dealing with a mixed economic picture, as last month’s non-farm payrolls added a less-than-expected 150,000 jobs, a sharp decline from the 240,000 average seen in the first quarter of 2026. While the latest CPI report showed annual inflation cooling to 2.8%, it remains above the Fed’s 2% target. We will be watching for any dovish shift in the Fed’s economic projections this Wednesday.
Technical Outlook And Trading Strategies
From a technical perspective, the USD/CHF chart appears to be forming a Head and Shoulders pattern, which often signals a trend reversal to the downside. Our focus is on the neckline of this pattern, located around the 0.8915 support level. A clean break below this area could trigger a more significant sell-off toward the May lows near 0.8850.
For the coming weeks, we believe that buying put options with a strike price around 0.8900 is a sensible strategy. This position allows traders to profit from a potential drop below the key support level following the Fed meeting. Implied volatility is likely to rise heading into the announcement, so establishing positions soon could be beneficial.
On the other hand, we must respect the immediate resistance area around 0.8980. A decisive move above this level would negate the bearish outlook and invalidate the Head and Shoulders pattern. In that event, we would pivot to buying call options, targeting a retest of the early June high at 0.9030.
