Swiss Franc: USD/CHF Likely to Stay Range-Bound – UOB

USD/CHF is currently trading near 0.82298, maintaining an overall range-bound pattern. UOB analysts Quek Ser Leang and Lee Sue Ann note that prior downside momentum has faded, with the pair expected to trade within a narrow range of 0.8185 to 0.8230 intraday. On a slightly longer horizon, the pair is likely to consolidate between 0.8155 and 0.8255 over 1-3 weeks, lacking clear directional breakout signals.

**Mixed Bullish and Bearish Factors Cap Trading Range**

The market is currently facing a tug-of-war between risk-off sentiment and U.S. economic resilience. On one hand, the Swiss franc, as a traditional safe-haven currency, gains buying support amid escalating global trade frictions. Market reports indicate that USD/CHF briefly broke below its consolidation range in early April, driven by safe-haven inflows triggered by a new round of tariff announcements. On the other hand, the recent U.S. non-farm payrolls report was robust, with job growth exceeding expectations, providing short-term support for the dollar and limiting downside room for the pair.

**Subdued Swiss Inflation Reinforces Central Bank's Dovish Stance**

Swiss fundamentals remain weak, with April's annual inflation rate falling to 0.0%, down further from March's 0.3%, nearing deflationary territory. The Swiss National Bank had already cut rates in March, and its dovish policy stance leaves the franc lacking a basis for sustained unilateral strength. According to observations from JPMorgan's G10 FX spot trading desk, factors such as the SNB's dovish tilt and extremely low franc yields all constitute bearish arguments for the franc, yet safe-haven demand makes it difficult for the currency to decline smoothly, ultimately resulting in the current standoff between bulls and bears.

**Medium-to-Long-Term Rebound Potential but Highly Limited**

UOB analysts still see room for USD/CHF to rebound in their 1-3 month outlook, though it will not retest July's highs. From a technical perspective, the pair currently sits above multiple moving averages, with moving averages broadly issuing buy signals, but oscillators such as the Relative Strength Index remain in neutral territory, confirming the range-bound assessment. The market is awaiting new catalysts to break this balanced pattern.