Trading USD/CHF
The USD/CHF currency pair, also known as ‘Swissy’, is popular in the forex space despite coming with certain challenges. This page will break down the history of the USD/CHF relationship, including its benefits and risks. We also look at how to start trading the USD/CHF in 2024, by capitalising on volume and volatility with charts, strategy, signals and trading hours.
USD/CHF Trading Brokers
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1
FOREX.comActive Trader Program With A 15% Reduction In Costs
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$1000.01 Lots1:50NFA, CFTCForex, Stocks, Futures, Futures OptionsMT4, MT5, TradingView, eSignal, AutoChartist, TradingCentralWire Transfer, Credit Card, Debit Card, Visa, Mastercard, Skrill, Neteller, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, PLN -
2
NinjaTrader
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Stocks, Options, Commodities, Futures, CryptoNinjaTrader Desktop, Web & Mobile, eSignalACH Transfer, Debit Card, Wire TransferUSD -
3
OANDA USCFDs are not available to residents in the United States.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)OANDA Trade, MT4, TradingView, AutoChartistWire Transfer, Visa, Mastercard, Debit Card, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD -
4
IGForex trading involves risk. Losses can exceed deposits.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOBCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD -
5
Interactive Brokers
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1001:50FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMAStocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, CryptocurrenciesTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentralCheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit CardUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF -
6
Videforex20% to 200% Deposit Bonus
$250$0.011:500Binary Options, CFDs, Forex, Indices, Commodities, CryptoTradingViewSkrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum PaymentsUSD, EUR, GBP, AUD, RUB -
7
Plus500 USWelcome Deposit Bonus up to $200Trading with leverage involves risk.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$1000.0 LotsCFTC, NFAFutures on Forex, Commodities, Cryptos, Indices, Interest RatesWebTrader, AppACH Transfer, Wire Transfer, Debit Card, Mastercard, VisaUSD -
8
Axofa10% Deposit Bonus
$10.01 Lots1:1000SVGFSAForex, CFDs, Stocks, Indices, CommoditiesMT5Debit Card, Credit Card, Visa, Mastercard, Neteller, Skrill, Bitcoin Payments, Wire TransferUSD, IDR -
9
CloseOption$10 Welcome Gift
$5$1National Bank of GeorgiaBinary Options on Forex & CryptosOwnPayPal, WebMoney, Mastercard, Perfect Money, Wire Transfer, Bitcoin Payments, Ethereum PaymentsUSD -
10
IQCent20% to 200% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$250$0.011:500IFMRRCBinary Options, CFDs, Forex, Indices, Commodities, CryptoOnline Platform, TradingViewCredit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, MastercardUSD, EUR
This is why we think these brokers are the best in this category:
- FOREX.com - FOREX.com continues to uphold its stature as a premier FX broker, offering over 80 currency pairs and boasting some of the most competitive fees in the industry. With EUR/USD spreads dipping as low as 0.0 and $5 commission per $100k, it stands out. Moreover, its SMART Signals help to identify price behaviors across numerous major currency markets.
- NinjaTrader - NinjaTraders supports the trading of popular currencies including the EUR/USD. The software also offers advanced features to streamline the trading experience, including complex order types like market if touched (MIT) and one cancels other (OCO).
- OANDA US - OANDA offers a diverse selection of 68 currency pairs, more than many alternatives. The broker’s in-house platform offers superb day trading capabilities via powerful TradingView charts, including 65+ technical indicators and 11 customizable chart types.
- IG - IG offers an above-average suite of 80+ currency pairs on its proprietary web platform, mobile app or MetaTrader 4, with more advanced charts and forex analysis tools available on the ProRealTime software. Forex spreads are competitive based on tests, starting from 0.1 pips on majors like the EUR/USD.
- Interactive Brokers - IBKR presents an extensive range of over 100 major, minor, and exotic forex pairs, surpassing the offerings of nearly all leading alternatives, though not CMC Markets. Forex trading occurs over multiple platforms and boasts institutional-grade spreads starting from 0.1 pips and 20 complex order types, including brackets, scale, and one-cancels-all (OCA) orders.
- Videforex - Trade 35 major, minor and exotic forex pairs through CFDs with floating spreads from 0.1 pips. Alternatively, binary options allow you to speculate on rising and falling prices with a fixed stake and payout.
- Plus500 US - Plus500 US offers futures trading on a small selection of 13 currencies, including popular pairs like the EUR/USD and GBP/USD. Day trading margins are competitive, starting from $40, while the educational resources do an excellent job of breaking down the basics of forex futures for new traders.
- Axofa - Axofa offers a decent range of 50+ forex pairs with raw spreads from 0.0 pips. Very high leverage up to 1:1000 and commission-free forex trading is available. With that said, the broker is not particularly transparent when it comes to account conditions and fees.
- CloseOption - CloseOption offers binaries on 25+ forex pairs, including majors like EUR/USD and a few minors like AUD/JPY. Payouts vary by currency, with decent typical payouts of 75% for GBP/USD.
- IQCent - IQCent traders can access CFDs or binary options on 45+ forex pairs. CFD spreads start from 0.3 pips and binary options payouts are decent up to 95%. This is competitive compared to Pocket Option, for example, offering forex payouts up to only 81%.
Trading USD/CHF Comparison
| Broker | Forex Assets | EUR/USD Spread | Forex App Rating | Minimum Deposit | Regulator |
|---|---|---|---|---|---|
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80+ | 1.2 | / 5 | $100 | NFA, CFTC |
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50+ | 1.3 | / 5 | $0 | NFA, CFTC |
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65+ | 1.6 | / 5 | $0 | NFA, CFTC |
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80+ | 0.8 | / 5 | $0 | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB |
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100+ | 0.08-0.20 bps x trade value | / 5 | $0 | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA |
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35 | Floating from 0.1 pips | / 5 | $250 | - |
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13 | 0.75 | / 5 | $100 | CFTC, NFA |
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10+ | From 1.6 pips | - | $1 | SVGFSA |
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20+ | No fee - payouts approx. 80% (Copper) | - | $5 | National Bank of Georgia |
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49 | 0.3 | / 5 | $250 | IFMRRC |
FOREX.com
"FOREX.com remains a best-in-class brokerage for active forex traders of all experience levels, with over 80 currency pairs, tight spreads from 0.0 pips and low commissions. The powerful charting platforms collectively offer over 100 technical indicators, as well as extensive research tools."
Christian Harris, Reviewer
FOREX.com Quick Facts
| Bonus Offer | Active Trader Program With A 15% Reduction In Costs |
|---|---|
| GBPUSD Spread | 1.3 |
| EURUSD Spread | 1.2 |
| EURGBP Spread | 1.4 |
| Total Assets | 80+ |
| Leverage | 1:50 |
| Platforms | MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, PLN |
Pros
- Alongside a choice of leading platforms, FOREX.com offers a superb suite of supplementary tools including Trading Central research, SMART Signals pattern scanner, trading signals, and strategy builders.
- With over 20 years of experience, excellent regulatory oversight, and multiple accolades including runner-up in our 'Best Forex Broker' awards, FOREX.com boasts a global reputation as a trusted brokerage.
- The in-house Web Trader continues to shine as one of the best-designed platforms for aspiring day traders with a slick design and over 80 technical indicators for market analysis.
Cons
- FOREX.com's MT4 platform offers approximately 600 instruments, significantly fewer than the over 5,500 available on its non-MetaTrader platforms.
- Demo accounts are frustratingly time-limited to 90 days, which doesn’t give you enough time to test day trading strategies effectively.
- Despite increasing its range of instruments, FOREX.com's product portfolio is still limited to forex and CFDs, so there are no options to invest in real stocks, real ETFs or real cryptocurrencies.
NinjaTrader
"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."
Tobias Robinson, Reviewer
NinjaTrader Quick Facts
| GBPUSD Spread | 1.6 |
|---|---|
| EURUSD Spread | 1.3 |
| EURGBP Spread | 1.6 |
| Total Assets | 50+ |
| Leverage | 1:50 |
| Platforms | NinjaTrader Desktop, Web & Mobile, eSignal |
| Account Currencies | USD |
Pros
- Low fees are offered, with $50 day trading margins & commissions from $.09 per micro contract
- NinjaTrader is a widely respected and award-winning futures broker and is heavily authorized by the NFA and CFTC
- NinjaTrader continues to deliver comprehensive charting software for active day traders with bespoke technical indicators and widgets
Cons
- Non forex and futures trading requires signing up with partner brokers
- There is a withdrawal fee on some funding methods
- The premium platform tools come with an extra charge
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| GBPUSD Spread | 3.4 |
|---|---|
| EURUSD Spread | 1.6 |
| EURGBP Spread | 1.7 |
| Total Assets | 65+ |
| Leverage | 1:50 |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- Day traders can enjoy fast and reliable order execution
- Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
- The proprietary OANDA web platform continues to deliver a highly competitive charting environment, including 65+ technical indicators powered by TradingView
Cons
- The range of day trading markets is limited to forex and cryptos only
- It's a shame that customer support is not available on weekends
- There's only a small range of payment methods available, with no e-wallets supported
IG
"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."
IG Quick Facts
| GBPUSD Spread | 0.9 |
|---|---|
| EURUSD Spread | 0.8 |
| EURGBP Spread | 0.9 |
| Total Assets | 80+ |
| Leverage | 1:30 (Retail), 1:250 (Pro) |
| Platforms | Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- IG is amongst the best in terms of its range of instruments, which includes stocks, forex, indices, commodities, and cryptocurrencies, providing ample diversification opportunities
- IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis
- The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met
Cons
- Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests
- While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients
- IG has discontinued its swap-free account, reducing its appeal to Islamic traders
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Interactive Brokers Quick Facts
| GBPUSD Spread | 0.08-0.20 bps x trade value |
|---|---|
| EURUSD Spread | 0.08-0.20 bps x trade value |
| EURGBP Spread | 0.08-0.20 bps x trade value |
| Total Assets | 100+ |
| Leverage | 1:50 |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- There's a vast library of free or paid third-party research subscriptions catering to all types of traders, plus you can enjoy commission reimbursements from IBKR if you subscribe to Toggle AI.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
- The new IBKR Desktop platform takes the best of TWS while adding bespoke tools like Option Lattice and Screeners with MultiSort to create a genuinely impressive trading experience for day traders at every level.
Cons
- You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
Videforex
"Newer traders will find a lot to enjoy about trading binary options on Videforex's easy-to-use proprietary platform, as well as the broker's copy trading solution. Payouts also remain higher than most alternatives climbing to 98%."
Videforex Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| GBPUSD Spread | Floating from 0.1 pips |
| EURUSD Spread | Floating from 0.1 pips |
| EURGBP Spread | Floating from 0.1 pips |
| Total Assets | 35 |
| Leverage | 1:500 |
| Platforms | TradingView |
| Account Currencies | USD, EUR, GBP, AUD, RUB |
Pros
- The firm facilitates both day trading and binary options which is great for those looking to diversify their portfolios
- Global clients can make free and fast transfers via a wide range of payment types, from credit cards to cryptocurrencies
- The support times are fast and reliable based on tests - few brokers offer 24/7 multi-lingual video support
Cons
- US clients aren’t accepted due to legal restrictions
- The broker isn’t overseen by a trusted regulatory agency
- No MetaTrader 4 integration
Plus500 US
"Plus500 US stands out as an excellent choice for beginners, offering a very user-friendly platform, low day trading margins, and access to the Futures Academy to enhance trading skills."
Michael MacKenzie, Reviewer
Plus500 US Quick Facts
| Bonus Offer | Welcome Deposit Bonus up to $200 |
|---|---|
| EURUSD Spread | 0.75 |
| Total Assets | 13 |
| Platforms | WebTrader, App |
| Account Currencies | USD |
Pros
- Plus500 US excels for its low fees with very competitive day trading margins and no inactivity fees, live data fees, routing fees, or platform fees
- The trading app provides a terrific user experience with a modern design, a clean layout and mobile-optimized charts
- The Futures Academy is an excellent resource for new traders with engaging videos and easy-to-follow articles, while the unlimited demo account is great for testing strategies
Cons
- Despite competitive pricing, Plus500 US lacks a discount program for high-volume day traders, a scheme found at brokers like Interactive Brokers
- The proprietary platform is user-friendly but lacks advanced technical analysis tools found in third-party solutions like MetaTrader 4
- Plus500 US does not offer social trading capabilities, a feature available at alternatives like eToro US which could strengthen its offering for aspiring traders
Axofa
"Axofa could be a good option for clients looking for social trading features alongside the MT5 platform. The low entry requirements and ECN spreads are particularly promising, but the lack of transparency and respected regulatory oversight raises security concerns."
Axofa Quick Facts
| Bonus Offer | 10% Deposit Bonus |
|---|---|
| GBPUSD Spread | From 1.6 pips |
| EURUSD Spread | From 1.6 pips |
| EURGBP Spread | From 1.6 pips |
| Total Assets | 10+ |
| Leverage | 1:1000 |
| Platforms | MT5 |
| Account Currencies | USD, IDR |
Pros
- Low ECN spreads are available from 0.0 pips, plus reasonable commissions at $3.50 per side
- There's a proprietary social/copy trading service for beginners looking to follow successful strategies and for experienced traders looking to sell their strategies
- Axofa offers the MetaTrader 5 platform which will particularly serve intermediate to experienced traders looking for advanced charting tools
Cons
- The offshore operations and lack of any regulatory oversight is a major concern
- Our team found inconsistencies between international subsidiaries and website information
- There is limited verifiable information about the broker’s owners and background
CloseOption
"CloseOption is a good pick for traders seeking a user-friendly binary options platform with high payouts and joining bonuses."
CloseOption Quick Facts
| Bonus Offer | $10 Welcome Gift |
|---|---|
| GBPUSD Spread | No fee - payouts approx. 80% (Copper) |
| EURUSD Spread | No fee - payouts approx. 80% (Copper) |
| EURGBP Spread | No fee - payouts approx. 80% (Copper) |
| Total Assets | 20+ |
| Platforms | Own |
| Account Currencies | USD |
Pros
- Multiple global payment methods are available
- CloseOption offers weekly trading tournaments with cash prizes
- New traders can get started with a $5 minimum deposit
Cons
- Clients need to deposit $50,000+ to qualify for the best payouts
- Binary options are only available on fiat and digital currencies
- CloseOption is not regulated by a well-regarded trading authority
IQCent
"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "
IQCent Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| GBPUSD Spread | 0.8 |
| EURUSD Spread | 0.3 |
| EURGBP Spread | 0.8 |
| Total Assets | 49 |
| Leverage | 1:500 |
| Platforms | Online Platform, TradingView |
| Account Currencies | USD, EUR |
Pros
- There's an accessible $0.01 minimum stake for new day traders with a small budget
- CFD trading fees are competitive based on tests, including 0.7 pips on major forex pairs such as EUR/USD
- The broker offers up to 98% payouts on binary options, which is more than alternatives like Pocket Option, only offering up to 92%
Cons
- The broker is not overseen by a respected regulator, though this is common among binary options firms
- IQCent charges a punitive $10 monthly inactivity fee if you fail to place at least 1 trade per month
- There's no automated trading support for algo traders
Chart
Breaking Down ‘USD/CHF’
Firstly, what does USD/CHF mean? The exchange rate you see is simply how many Swiss francs (the quote currency) it will cost to buy one US dollar (the base currency).
The USD/CHF is one of the most popular traded currency pairs on the forex market. The CH stands for ‘Confoederatio Helvetica’. This is Latin for Switzerland. Whilst the F stands for ‘franc’.
But what makes this pairing so interesting?
- The US dollar is the world’s largest and most actively traded currency. In fact, it represents approximately half the trading volume of all major currencies.
- The Swiss franc is popular because Switzerland holds an impressive one-third of the world’s privately-owned wealth in its banks.
It’s also worth bearing in mind that Switzerland is not the only country to use the Swiss franc. Liechtenstein, located between Switzerland and Austria and consisting of just 35,000 inhabitants, also use the Swiss franc.
Why Day Trade USD/CHF?
With so many currency pairings available, why does the USD/CHF currency pair deserve your attention?
- Liquidity – Despite being relatively less volatile than other pairs and less liquid than the euro and pound, this pair is still relatively straightforward to trade. Whilst there is an array of influences to consider, rates mainly depend on political and economic instability. This is particularly true when international turmoil strikes, as investors rush to the supposed safety of the Swiss franc.
- Pound similarities – If you have traded or do trade the pound, then the USD/CHF makes for a smooth transition. The British pound and Swiss franc share similar attributes in terms of volatility, price shifts, and technical characteristics. So, looking at the development of the pound may help you predict fluctuations in the USD/CHF.
- Diverse trading instruments – Due to volume and volatility, you have a number of different USD/CHF trading vehicles at your disposal. From ETFs to futures, options, including E-micro USD/CHF futures.
- Stable price information – Due to the regular and consistent flow of economic data from the US, Switzerland, and Europe, conducting fundamental analysis is comparatively easy.
- Availability of resources – In some ways, making money from online chart investing is more straightforward today. You have access to plenty of bar charts, graphs, and commentary websites, not to mention forums full of advice from experienced traders. You even have weekly charts, forecasts, outlook, and the tools needed for Elliott wave analysis.
Drawbacks & Risks
Although the USD/CHF pair comes with a number of benefits, there are also certain drawbacks and risks you should be aware of. The most significant of which are:
- Safe haven dilemma – There is some ambiguity to consider when day trading the USD/CHF now. In times of crisis, both are considered reserve currencies. The problem is, it can be challenging to spot which one people will turn to.
- Dangers of leverage – Leverage and margin trading allow you to borrow capital to increase your position size. Whilst this may boost potential profits, it can also substantially increase losses.
- Volatility – Compared to some currency pairs, including many of the majors, the USD/CHF simply does not promise the same levels of volatility. The result of this is less significant spikes and drops, and therefore, less opportunity to generate profits.
- Automated competition – Profiting from the USD/CHF today means battling with an increasing number of sophisticated algorithms. Even with monthly charts to hand, live streaming data is being analysed and acted upon almost instantaneously by any number of trading bots.
Influences on Movement
Trading the USD/CHF currency pair relies on a detailed understanding of what influences changes in prices and rates. Unfortunately, candlestick charts cannot give you the context that can often prove invaluable.
So, what affects movement in the USD/CHF exchange rate?
- Monetary policy – The actions of both the Federal Reserve (Fed) and the Swiss National Bank (SNB) will impact price action. The SNB, for example, is known to take an active role in maintaining exchange rates and taking steps to reduce recession and currency deflation. So, keep an eye out for the quarterly SNB announcements on interest rates and policy.
- Swiss economic data – Economic strength and weakness cause price movements. So, there are some specific announcements that can cause USD/CHF spikes. These include the Swiss Purchasing Managers’ Index (PMI), the Swiss Consumer Price Index (CPI), plus the KOF Economic Barometer. This final resource provides twenty-five economic indicators that make predictions on how the market will perform over the next two quarters.
- US economic data – The strength of the US economy will influence the currency pair. So, there are certain reports to keep a track of. Employment data, jobless claims, retail sales growth, plus PMI data, can all cause shifts in USD/CHF rates.
- Wars & natural disasters – Events that affect trading partners of either country or that directly impact the two respective countries, can all be felt in the USD/CHF currency pair. This highlights the need to keep abreast of live news updates.
USD/CHF Currency Correlations
Currency pairs do not move independently of each other. Many are tied to the movement of other pairs. This is known as correlation. Correlation is a statistical measure, ranging from -1 to +1. You can have either:
- Positive correlation – This is when FX pairs move in line with each other. The GBP/USD, AUD/USD, and EUR/USD currency pairs are all positively correlated. This is because the US dollar is the counter currency. This means any change to the US dollar is felt in all pairs.
- Negative correlation – This is when currency pairs move in the opposite direction. This is seen in the USD/CHF, USD/JPY, and USD/CAD pairings. This is a result of the US dollar being the base currency.
Often the USD/CHF currency pair is negatively correlated with the EUR/USD. So, traders usually sell the USD/CHF when the EUR/USD price surges. The opposite then happens when the USD/CHF rallies.
There is also a negative correlation between the USD/CHF and the GBP/USD pairs. This is a result of the positive correlation of the Swiss franc, euro and British pound.
Switched on day traders will use this information to their advantage. Looking to other currency pairs may allow you to make more accurate short-term projections as to the movements of the USD/CHF.
USD/CHF Day Trading Strategy
Timing
One of the things that appeal about forex trading and investing is that markets are open 24/7, and you actually get a lot more profitable trading time with the USD/CHF pair than many others. You can trade the pair from Sunday evening until Friday afternoon in the US. However, both volume and volatility will vary throughout the day.
You will find both highs and lows during each 24-hour cycle, but bid-ask spreads will widen during quieter periods, then narrow during active periods. So, when is the best time to trade the USD/CHF pair?
The biggest daily moves often take place when Eurozone and Swiss economic data is released, plus at opening hours for equity, options and futures exchanges. A lot of the data mentioned on this page is usually released between 02:00 and 05:00 ET. The half an hour to one hour before these releases and the three hours afterwards will see the most activity.
Also, some US economic releases can come between 08:30 to 10:00 ET. Again, the periods preceding and following these releases can trigger price action. So, many strategies may benefit from focussing their attention on these time periods.
Traders should also note that forex action often drops significantly around the US lunch hour.
Example
If you’re looking for a simple, straightforward USD/CHF day trading strategy, then consider the example below.
Whilst some traders prefer a 5-minute or 15-minute real-time chart, for this basic strategy, a 1-hour chart is recommended.
You then simply need to mark the high and low of each candle of the trading day. Then your pending order buy should be entered 10 pips above the high. Whilst your pending order sell should be entered 10 pips below the low.
You will also need to minimise your risk and protect against substantial losses. So, place a stop-loss 30 pips from your buy/sell order.
The example here is basic. If you are looking for more detailed strategies, take a look at our strategy page.
News
Some people prefer day trading the USD/CHF currency pair using historical price charts and complex data. Whereas some focus on trading breaking news. News updates can quickly influence market sentiment.
However, to profit from these announcements you need to be tuned in and ready to react at a moment’s notice. Plus, you need access to reliable and thorough sources.
Below you will find some of the most popular and relevant news resources:
- Google Finance
- Yahoo Finance
- Forex factory
- Bloomberg
- Reuters
- CNBC
On top of breaking news announcements, these sources can also provide a number of other useful services:
- Forecasts for this coming week
- Exchange forecasts and daily analysis
- USD/CHF specific trading definitions
- Price history reviews and yearly averages
- Alternative trend views and perspectives
- Long-term data, from 20 years to 30 years worth of charts
- Technical outlook and latest analysis from experienced traders
So, if day trading on the USD/CHF using the news is part of your plan, all of the above are resources worth exploring.
History
Early History
Since the launch of the Swiss franc in 1850, the franc has enjoyed enormous strength as a currency. Today the USD/CHF pair now boasts the sixth-largest volume in the global forex space. Originally though, the history of the pair represented steady investment connections between the US and Switzerland.
Direct investments from the US to Switzerland have hit a massive $129.8 billion. As such, over the years the US has become Switzerland’s top destination for foreign direct investment (FDI).
Both currencies have also benefited from strong trade ties. The US is Switzerland’s second-largest trade partner after Germany, representing a 10% share of Switzerland’s foreign trade. Conversely, Switzerland is the US’s 17th largest trading partner, worth just 1.4% of total US trade.
These trade and investment connections shaped much of the USD/CHF relationship for many years. Today, however, current prices and forex live charts respond to more current events.
Recent History
To some extent, the great depression shaped the Swiss franc we know today. It appreciated against all other major trading partners, except the Japanese yen. It grew so strong the SNB actually stepped in to intervene in the currency market.
The SNB aimed to halve the appreciation of the franc against the euro. However, the intervention had clearly failed by 2014. So spectacular was the failure that the franc surged, rallying over 25% in just a few minutes.
It is clear then that the SNB play a vital role in the FX market. This is particularly the case for those trading binary options based on the USD/CHF pair.
Many people do not realise the extent that movement in your live, forex interactive chart is influenced by past events. Events that if you know happened before, allow you to analyse and predict the effects on FX rates this time around.
Role of US Dollar
Whether your day trading strategy relies on support and resistance levels, daily pivot points, or breaking news, having a feel for the staggering role the US dollar plays will help you anticipate future price movement.
Below are some of the key roles the US dollar plays:
- Some countries adopt the US dollar instead of their own or peg their own currency to its value.
- The US is the second-largest trading nation in the world, following China.
- Oil transactions by OPEC countries are often carried out in the US dollar.
- Many banks all over the world hold currency reserves in the US dollar.
- The US accounts for a staggering 25% of the global nominal GDP.
- The US dollar is the most popular traded currency in the world.
- It is commonly used to settle international transactions.
Just a brief look at a long-term USD/CHF chart will show you how prices and average daily ranges shift when announcements are made about the US dollar.
To understand whether the US dollar will strengthen or weaken against the Swiss franc then, you will need to consider a number of important economic indicators.
The most important of which, are as follows:
- Consumer Price Index (CPI)
- Producer Price Index (PPI)
- ISM Non-manufacturing
- Federal Reserve Minutes
- Industrial Production
- ISM Manufacturing
- Non-farm payrolls
- Trade Balance
- Retail Sales
So, USD/CHF technical analysis and forecasts for today should take note of important data releases in the economic calendar.
Also, bear in mind the Federal Open market Committee holds eight regularly scheduled meetings per year and economic projections will be published along with press conferences every three weeks. All will result in the US dollar moving sharply against other currencies, including the Swiss franc.
Role of Swiss Franc
Getting to grips with USD/CHF day trading means understanding what drives the Swiss economy and franc. Switzerland has famously remained neutral in all major wars in Europe. It is also surrounded by the Alps and considered a stable, isolated nation. This has resulted in the Swiss franc becoming a safe haven currency when turmoil strikes.
This reputation is bolstered by their role in private banking. Despite rules loosening somewhat in the last ten years, Switzerland remains a huge global player in the private banking, insurance, and investment management sectors. They are home to global titans UBS and Credit Suisse.
However, focussing on economic activity in the Eurozone, which influences US movements, is perhaps more useful. 80% of Switzerland’s trade activity happens with the EU.
This means the SNB is often more concerned with its currency vs the euro than the US dollar. It usually only steps in if the franc is too weak or strong vs the euro. Why? Because this will benefit Swiss export businesses, that are mainly involved in trading with neighbouring countries.
To a certain extent then, the role of the Swiss franc and the size of the economy is determined by the successes of their major exporting industries. You will know of two of their big exporting industries, watches and pharmaceuticals.
Overall, your daily forex analysis will be influenced by the huge role the Swiss franc plays as a stable, safe-haven currency. Not to mention the support of the formidable banking system it has behind it.
Final Word on USD/CHF Trading
Day trading on the USD/CHF currency pair promises volatility, volume and liquidity. However, generating profits can prove challenging as the Swiss franc is seen as a safe-haven currency.
You will need to use in-depth technical analysis, calling on charts, patterns, the latest foreign exchange news, plus a range of economic resources and indicators. It is also important you find the best forex trading platform for your needs, who will facilitate fast and cost-effective trading.
If you can do all of the above, then you’re one step closer to joining the likes of hugely successful forex traders, such as George Soros and Richard Dennis.
For more guidance, see our forex page.
FAQ
What Is USD/CHF?
USD/CHF is one of the most popular traded currency pairs in the forex market, also known as the ‘Swissy’. The pair represents the exchange rate of how many Swiss francs (quote currency) it will cost to buy one US dollar (base currency).
Why Is Trading The USD/CHF So Popular?
The USD/CHF currency pair is popular due to the US dollar being the base currency (the world’s largest and most actively traded currency). In addition, the Swiss franc is often regarded as a safe haven currency, since Switzerland is a relatively stable country politically and financially.
What Are The Benefits Of Trading USD/CHF?
USD/CHF is less volatile than others pairs and also relatively liquid. Due to its stability, it is also fairly easy to apply technical and fundamental analysis when trading the currency pair. Traders can also enjoy a range of trading vehicles, such as futures, options and ETFs.
What Are The Risks Of Trading USD/CHF?
Due to less volatility than other pairs, traders may not have as many opportunities to profit from price swings. In addition, using leverage and margin when trading can carry some substantial risks.
How Can I Start Trading USD/CHF?
To start trading USD/CHF, you will need to register at an online broker. This will allow you to make a deposit and use the available trading platforms, such as MetaTrader 4. If you’re new to trading, it’s advised to start practising in a demo account first, which is usually offered for free.