The US Dollar rose from 0.7775 against the Swiss Franc on Friday, but it stayed below 0.7845 on Monday. This keeps the short-term downward trend in place.
Market mood turned cautious on Monday as expectations of a quick end to the Middle East war eased. The Dollar got slight support after the US seized an Iranian cargo vessel in the Gulf of Oman on Sunday, and Iran threatened to miss peace talks due on Tuesday.
Most Dollar pairs stayed near last week’s peaks as markets continued to expect talks between Washington and Tehran to resume this week. USD/CHF has fallen from around 0.8050 since late March and found support near 0.7775 at the 61.8% Fibonacci retracement from the 27 January low to the 31 March high.
On the 4-hour chart, the RSI moved from oversold levels to the low-40s. The MACD sits just above zero with a mild upward slope, pointing to weaker selling pressure rather than a clear rise.
A break above 0.7845 (16 April high) could shift focus to about 0.7930 (8 and 10 April highs) and a falling trendline near 0.7950. Below 0.7775, targets include 0.7700 (78.2% retracement) and 0.7670 (27 February low).
Looking back at the analysis from April 2025, we can see the market was balancing on a knife’s edge. The cautious optimism that Washington and Tehran would return to the negotiating table proved to be misplaced. The talks officially collapsed in the final week of that month, triggering a significant safe-haven flow that pushed USD/CHF decisively through the 0.7700 support level we were monitoring.
The immediate aftermath saw a surge in market uncertainty, which was clearly reflected in the derivatives market. In May 2025, one-month implied volatility on USD/CHF options jumped from around 7% to over 12% as traders scrambled to hedge against further downside. This flight to safety was so pronounced that the Swiss National Bank’s foreign currency reserves grew by over CHF 40 billion in the second quarter of 2025, signaling heavy intervention to weaken the franc.
That geopolitical breakdown set the bearish tone for the last twelve months, establishing a new, lower trading range for the pair. The persistently strong Franc has had a tangible economic impact, with Swiss manufacturing PMI dipping below the 50-point growth threshold for two consecutive quarters in late 2025. We now see the pair consolidating around the 0.7550 level, well below the action from last year.
For the coming weeks, traders should consider selling out-of-the-money puts to collect premium, as the 0.7500 level has proven to be a durable floor supported by central bank vigilance. However, given the recent whispers of renewed back-channel communications between US and Iranian officials, buying long-dated, low-cost call options is a prudent strategy. This offers exposure to a potential sharp upward reversal should a diplomatic surprise emerge, without risking significant capital in the current sideways grind.
