USD/CHF plummeted to a 13-year low driven by safe-haven demand for the Swiss Franc. Technical analysis now suggests a potential minor mean reversion corrective rebound may be near.
Chart of the week: USD/CHF
USD/CHF was previously featured as our prior "Chart of the week - USDCHF safe-haven demand and bearish outlook.," published on 28 May 2025.
Since our last publication, the safe-haven Swiss franc has rallied sharply against the US dollar, with the USD/CHF plummeting as expected towards the 0.7980 support on 27 June, as highlighted in our report.
Thereafter, the USD/CHF continued its downward drift, hitting a 13-year low of 0.7872 on July 1, the lowest level since September 2011, ignoring the dovish monetary policy guidance of Swiss National Bank (SNB) where it cut its policy interest rate by 25 bps to 0% on 19 June, setting borrowing costs at zero for the first time since negative rates in late 2022.
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Fig 1: 1-month rolling performance of the US dollar against major currencies as of 7 July 2025 (Source: TradingView)
Fig 2: USD/CHF medium-term trend as of 7 July 2025 (Source: TradingView)
Based on a one-month rolling performance as of 7 July, the US dollar performs the worst against the Swiss franc among the major currencies as the USD/CHF shed -3.3% (see Fig. 1).
Interestingly, recent price actions of the USD/CHF according to technical analysis suggest a potential minor mean reversion corrective rebound after seven weeks of impulsive bearish down moves since 13 May.
The weekly candlestick of the week of 30 June has formed a bullish “Hammer” pattern, and the daily RSI momentum indicator has flashed out a bullish divergence condition at its oversold region from 24 June to 1 July (see Fig. 2).
These observations suggest a slowdown in bearish momentum. Watch the 0.7870 key pivotal support, with the next intermediate resistances coming in at 0.8050 and 0.8100 (also close to the 20-day moving average).
However, failure to hold at 0.7870 invalidates the corrective rebound scenario for the continuation of the bearish trend to expose the next medium-term supports at 0.7795, 0.7710/7695, and 0.7635.
