USD/CHF Plummets to 0.7916 as Dollar Weakens and Swiss Policy Gap Fuels Volatility

USDCHF trades weak on board-based US dollar selling. It hits an intraday low of 0.79166  and is currently trading around 0.79157.

As of September 2025, the monetary policy difference between the Federal Reserve and the Swiss National Bank has grown to around 450 basis points. Expect only two cuts this year and a 52.7% chance of a September as the Fed maintains rates at 4.25%-4.5% in light of continuing inflation and tariff uncertainty. Though the SNB has cut rates to 0% five straight times since March 2024 under deflationary pressures (-0.1% inflation in May). USD/CHF has risen to multi-year highs as a result of this historical gap, therefore worsening Swiss export difficulties despite predicted modest GDP growth of 1–1.5% for 2025–2026, supported by pre-tariff. With US inflation risks versus Swiss deflation reflected in diverse economic realities, the prognosis calls for persistent divergence, and the SNB avoiding negative rates likely saves a deflationary spiral and encourages investors toward hybrid hedging using options and substitute assets, therefore boosting CHF volatility.

Technical Analysis Points to Further Downside

The pair is trading below  55-EMA,  the 200 EMA and 365 EMA on the 1-hour chart, indicating a weak trend. The immediate resistance is at  0.7958; any break above targets  0.8000/0.8070/0.8090/0.8135/0.8170/0.8215/0.8250.

Support Levels and Potential Declines

On the downside, near-term support is around 0.7900; any violation below will drag the pair to 0.7860/0.7800.

Indicators (1-hour chart)

CCI (50) - Bearish

Directional Movement Index -  Bearish

Trading Strategy Recommendation

It is good to sell on rallies around 0.7968-70 with SL around 0.8010 for a TP of 0.7860.