The USDCHF pair experienced substantial selloffs following last Wednesday’s tariffs announcement, with traders moving to the Swiss Franc as a safe haven. The Swiss Franc is considered the preferred safe haven in the forex market, while the US dollar has shown mixed performance against various currencies.
Market Dynamics
Current market dynamics reflect a lack of divergence as traders anticipate further cuts from central banks. The Swiss National Bank’s 2-year yield briefly fell into negative territory, indicating expectations of potential negative rates.
Market sentiment remains sensitive to tariff developments, particularly regarding US-China relations. As the weekend approaches, traders remain focused on this news landscape.
Daily chart analysis shows a return to cycle lows, with buyers likely positioning for recovery. Sellers will seek to drive prices lower to establish bearish bets.
On the 4-hour chart, a downward trendline represents ongoing bearish momentum. Traders may consider selling on pullbacks to this trendline, while buyers hope for upward breaks to target higher prices.
Lastly, the 1-hour chart reveals minor resistance at the 0.8450 level. Sellers may continue to dominate this area, while buyers look for upward movement to challenge lower points.
Safe Haven Shift
Given the sharp move lower triggered by last week’s tariff news, particularly the shift from dollar exposure to franc positioning, the message is loud and clear: safe-haven capital still favours simplicity — and Switzerland offers that in spades. With the 2-year Swiss yield dipping into negative territory, the mood feels unmistakably defensive. Volatility-prone outlooks on equity and commodity markets only amplify this effect. What’s striking is the firm pricing-in of potential easing paths across policymakers, and that leaves little room for surprise in policy meetings on the calendar.
While we watch tariff stories unfold with interest, it’s the reaction to these headlines, not the headlines themselves, that shows us what traders think risk truly means now. The market isn’t dithering — movement toward the Swiss Franc has been swift and measured. With this we find ourselves reassessing return expectations in other correlated markets.
Looking closer at recent charts, the re-test of cycle lows implies that a large portion of buyers believes the bottom is either near or already in. Yet caution remains. Notably, selling interest isn’t retreating entirely — hesitation to break higher means short positioning on pullbacks may still offer opportunity, especially if protective stops cluster around predictable resistance blocks.
The 4-hour chart remains instructive. The slope of the descending trendline offers more than just a technical anchor — it serves as a behavioural marker, revealing where market participants repeatedly shy away from risk. When price approaches that resistance, we often see volume trail off, showing that nobody’s quite ready to drive an aggressive shift.
In the shorter-term timeframes, such as the 1-hour chart, price flirted with the 0.8450 region, a spot where sellers previously reloaded. This line has acted like a fulcrum; every attempt above has been met by renewed pressure. For as long as price fails to clear and hold above this mini-resistance, it remains a natural staging point for tactical short entries, with tight stops above and modest downside aims. There’s little reason to step in front of it prematurely.
We’ve been watching option markets for signs of repricing but implied vols remain relatively stable. That could suggest expectations are staying anchored, even as positioning rotates. What often happens — and has likely happened again — is that traders are hedging tactically rather than over-committing to directional bets.
Overall, it’s an environment where waiting for clear breaks is possibly better than anticipating them too early. Reaction rather than prediction stands to offer the better reward-risk setups in the coming sessions.
