As shown on today’s USD/CHF chart, the US dollar has dropped against the Swiss franc to its lowest level in three months.

In December, the pair has declined by around 1.9%. This move reflects not only US dollar weakness—driven by expectations of further Federal Reserve rate cuts in 2026—but also the strength of the franc, whose appeal has been reinforced by recent news:

→ In December, the Swiss National Bank left its key interest rate unchanged at zero and commented that the reduction in US tariffs on Swiss goods has improved Switzerland’s economic outlook.

→ Rising geopolitical tensions, including developments near the Venezuelan coast.

Technical Analysis of USD/CHF

During November and December, price fluctuations formed a descending channel, with central bank decisions acting as the main catalyst for the decline.

Today’s setup is notable in that:
→ the price is trading close to the lower boundary of the channel;
→ the RSI indicator is showing a bullish divergence.

It is worth noting that the 0.7880 level acted as support in October and November. The current dip may therefore turn out to be a bear trap, referred to in Smart Money Concepts terminology as a liquidity grab.

From this perspective, USD/CHF could stage a corrective rebound towards the channel’s median, in which case a retest of former support around 0.7925 cannot be ruled out.

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