USD/CHF accelerates its downtrend and approaches 0.9100
|- US dollar breaks below 0.9160 and nears 0.9100.
- Weak US economic growth figures hurt the USD.
- USD/CHF: Breach of 0.9160 support has increased downward momentum.
The USD/CHF has accelerated its reversal from Tuesday's highs at 0.9225, breaking below 0.9160 to reach fresh seven-week lows at 0.9120 amid broad-based dollar weakness.
Weak US data pulls the dollar further down
The greenback broke below intra-day support at 0.9160/70, hammered by the release of weaker than expected US Gross Domestic Product data. According to advanced estimations, the US economy decelerated to a 2% pace in the third quarter, from 6% in the second, even below the already slower 2.7% pace expected. Supply chain restrictions and a sharp decline in consumer spending have curbed economic growth.
These figures represent the weakest performance since the second quarter of 2020, when the first COVID-19 restrictions hit the US economy, and have crushed market hopes of a strong post-pandemic recovery.
The upbeat quarterly earnings by Caterpillar and Merck released today, which have helped US stock markets to pick up after a post-GDP dive, have failed to lift the US dollar, which remains sold across the board. The US Dollar Index has dropped 0.6% on the day to reach levels below 93.50 for the first time in the last four weeks.
USD/CHF: Break of 0.9150 support increases negative momentum
The pair has broken below at 0.9150 (October 22 and 24 lows) earlier today, which has increased bearish pressure. With technical indicators turning down, the next potential support levels are 0.9100 (August 18 and 30 lows) and then August 4 low at 0.9020 ahead of June lows at 0.8925.
On the upside, the pair should regain the mentioned 0.9050 and 0.9225 (October 26 high) to ease negative pressure and set its aim towards October 18 high at 0.9275.
Technical levels to watch
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