USD/CHF reversed on Wednesday after peaking just above 0.8000 earlier in the week. The move reached session lows near 0.7870, then edged back to around 0.7890.
The US Dollar fell broadly after reports of a US–Iran agreement to pause hostilities for two weeks. The reports also referred to safe passage for gas and oil tankers through the Strait of Hormuz.
Trendline Break Signals Pullback Risk
USD/CHF moved below an ascending trendline support, ending the upward phase that began from the February 27 low. This shift points to the risk of a deeper pullback.
The Relative Strength Index sits near 30 after falling from above 60. The MACD remains below its signal line in negative territory.
Support is noted between the 50% Fibonacci retracement of the March rally at 0.7860 and the March 23 low at 0.7835. Resistance is seen at 0.7905, then near the broken trendline around 0.7965.
The technical section was produced with assistance from an AI tool.
Derivative Strategies For A Bearish Bias
We recall this analysis from last year when the USD/CHF pair broke its bullish trendline following a temporary ceasefire announcement. That move below 0.7900 did precede a further slide for the rest of 2025. This technical breakdown proved to be a significant signal for the medium-term trend.
The current environment, however, is being shaped more by diverging central bank policies than fleeting geopolitical headlines. The Swiss National Bank is holding firm on interest rates as recent March 2026 inflation data showed a stubborn 2.1% reading. This contrasts with the U.S. Federal Reserve, which has signaled a pause and is now expected to consider at least one rate cut before the end of the year.
For derivative traders, this fundamental backdrop supports strategies that benefit from a continued, gradual decline in USD/CHF. With the pair currently hovering near 0.7800, buying put options with expiries in the next one to three months could capture this expected weakness. A bear put spread would be a lower-cost alternative to express the same view.
Given that market volatility has been relatively subdued, with the VIX index holding near 15, selling out-of-the-money call options is also an attractive strategy. This allows traders to collect premium while positioning for the pair to remain below key resistance levels. A bearish risk reversal could also be structured to finance a long put position.
The old support level noted last year near 0.7835 has now become a critical pivot point for us. A decisive break below this area in the coming weeks would likely trigger a test of the late 2025 lows around 0.7700. Traders should use this level as a key indicator for increasing bearish positions.
