USD/CHF erases daily losses amid USD recovery
|After falling to its lowest level since last Wednesday at 0.9696, the USD/CHF pair gathered some bullish momentum in the first half of the NA session and erased its daily losses. As of writing, the pair is trading at 0.9730, virtually flat on the day.
Although there were no macro data that impacted the price action, hawkish comments from New York Fed President William Dudley helped the greenback recover its losses against its rivals, pushing the US Dollar Index back above the 97 handle. Dudley argued that both the inflation and the unemployment were in a 'pretty good place' and added that halting the tightening cycle could damage the economy.
- Fed’s Dudley: Inflation is ‘a little lower’ than Fed would like
- Fed's Dudley: Halting tightening cycle would damage economy
Additionally, boosted by the solid performance of European stock market, major equity indexes in the U.S. started the day higher, making it difficult for the safe haven CHF to find demand and remain resilient against the greenback. At the moment, the Dow Jones Industrial Average is up 0.55% while the S&P 500 gains 0.7%.
Technical outlook
The RSI on the daily graph is moving sideways around the 50 handle, suggesting that the pair is struggling to find direction in the short-term. A decisive break above 0.9800 (Fib. 38.2% retracement of May 11 - Jun. 6 fall/psychological level) could open the door toward 0.9900 (psychological level) and 0.9935 (100-DMA). To the downside, supports could be seen at 0.9700 (20-DMA), 0.9610 (Jun. 6 low) and 0.9550 (Nov. 9 low).
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