Alex von Stachelkopf
⬤ The Swiss franc continues holding firm against the US dollar, with USD/CHF trading around 1.2650 near the top of its recent consolidation zone. The franc has gained support from weakening equity markets and increased demand for safe-haven assets. Price action shows stability above the 1.2390 support level, though multiple attempts to break above 1.2700 resistance have failed.
⬤ The current setup suggests consolidation rather than a reversal. After rallying sharply earlier, USD/CHF has settled into a sideways range between roughly 1.2200 and 1.2700. The RSI sits near neutral territory, showing balanced momentum without extreme readings. What's notable is that price remains comfortably above the 1.2000 psychological level, signaling that demand for the franc hasn't disappeared.
⬤ Positioning dynamics are playing a major role here. There's a large short position in the Swiss franc, which makes the currency more sensitive when risk appetite sours. When stock markets drop or volatility spikes, leveraged trades funded in CHF tend to unwind quickly, pushing the franc higher. This mechanic is similar to what we've seen historically with the yen, but may actually be stronger now.
⬤ For the broader market, the franc's strength matters because it often reflects underlying risk conditions. Continued CHF support suggests investors remain cautious about equities and riskier assets. As long as USD/CHF holds above key technical supports and uncertainty persists, the franc is likely to stay well-bid as a defensive play in the currency markets.
Alex von Stachelkopf
