The stability of the Swiss economy and inflation remaining below 1% have helped the Swiss franc maintain its reputation as a safe-haven asset, particularly amid heightened geopolitical tensions and elevated gold prices. As illustrated on the USD/CHF chart, the US dollar declined against the franc to below 0.7650 in February, marking its weakest level since mid-2011.
However, the pair has since begun forming a sequence of higher lows, indicating that a solid support zone may be developing. The escalation of military activity in the Middle East earlier this week contributed to a rebound in the USD, which also strengthened against the franc. This may suggest that some market participants now view the Swiss currency as an overvalued safe-haven.
It is also worth noting that:
→ This week may deliver the second-largest weekly gain since the start of 2025.
→ The Swiss National Bank (SNB) has recently signalled that currency interventions could be considered if the franc’s strength becomes excessive.
Technical Analysis of the USD/CHF Chart
From a bearish standpoint:
→ The 0.7870 level, which served as support for much of 2025 before being broken, has predictably acted as resistance during this week’s recovery.
→ The rebound from the February low could be interpreted as a bearish flag formation within the broader long-term downtrend, suggesting the possibility of a continuation of that trend.
From a bullish standpoint:
→ Buying pressure has successfully pushed through a local resistance line (marked in red), which means the 0.7760 level could now function as support.
→ Current price fluctuations are shaping what appears to be an ascending channel.
Since USD/CHF remains close to its multi-year lows, it is possible that the projected blue path represents not just a temporary correction within a longer-term bearish trend but the early stage of a larger bullish reversal. If this scenario unfolds, the lower boundary of the blue channel could become a key strategic support level.
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