USD/CHF drops to nine-day lows, EUR/CHF tumbles 150 pips
|- Swiss franc jumps across the board amidst risk aversion and despite Jordan’s words.
- Bearish correction in USD/CHF gains speed.
- Next support is below 0.9880 at 0.9830 and 0.9800.
The USD/CHF fell sharply during the American session from 0.9970 to 0.9860, reaching the lowest level since May 6. It remains near the lows, under pressure amid risk aversion. The Swiss franc and the Japanese yen are the best performers.
CHF soars, Wall Street plummets
The Swiss franc started to rally after comments from Thomas Jordan, Swiss National Bank Chairman. He reiterated that the SNB is ready to intervene in the currency market and act if inflation strengthens. Despite reaffirming the negative interest rate policy, the Swiss franc started to rise. It then accelerated as stocks in the US turned sharply lower.
The Dow Jones is falling 2.65%, and the Nasdaq tumbles 3.72%. The demand for safety is boosting the yen, the franc, the dollar and bonds. Crude oil reversed and is now down 1.70%. Cryptocurrencies are again under pressure, with BTC/USD below $29,000.
Despite more comments about rate hikes from European Central Bank officials, the EUR/CHF is having the worst day in months. During the last hours it dropped from 1.0490 to 1.0338, the lowest intraday level since May 6.
The short-term technical outlook in USD/CHF changed dramatically during the last two days. After a rally from 0.9330 to 1.0054 (May 16 high), the pair lost momentum and on Tuesday started a correction that is still strong. A consolidation below 0.9880 should keep the negative momentum in place. The next support is seen at 0.9830 and then at 0.9800/10 awaits the 20-day Simple Moving Average.
Technical levels
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