USD/CHF dives to 0.9440 and turns negative on the day
|- US dollar's upside attempt fails below 0.9500 and the pair retreats to 0.9440.
- The dollar loses ground amid a moderate improvement in risk sentiment.
- USD/CHF: Important support at 0.9425/20– Credit Suisse
The dollar has lost footing during the US session, following a weak recovery attempt, which has been capped right below 0.9500 and retreated to session lows at 0.9440 area. The greenback loses ground for the second consecutive day, with positive macroeconomic data and news about progress towards a COVID-19 vaccine have eased risk aversion.
US dollar loses ground as risk aversion eases
The greenback’s is on track to its second consecutive day in red with market sentiment lifted a string of upbeat manufacturing figures, which have boosted hopes of an economic recovery. The US Markit Manufacturing PMI has improved to 49.8 in June from 49.6 in May, which shows that the sector’s activity is recovering from the coronavirus-induced collapse.
Beyond that, news about the positive results of the coronavirus vaccine from Germany’s BioNTech has boosted market sentiment further, easing concerns about the worldwide increase of infections.
USD/CHF: Important support at 0.9425/20– Credit Suisse
The FX Strategy Team at Credit Suisse expects USD weakness to resume and points out to the 0.9425/20 a key level to accelerate the downtrend, we look for weakness to resume, with support seen initially at 0.9508, then 0.9479, ahead of 0.9442/33 and 0.9425/20, where we expect to see a first attempt to hold. Removal of here would then expose the current June low at 0.9376, beneath which would see the recently completed ‘hammer’ candlestick negated and we would then expect to see another leg lower. Support is seen thereafter at the 78.6% retracement of the March 2020 surge at 0.9337/21, where we also could see fresh buyers at first.”
USD/CHF key levels to watch
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