USDCHF falls to weekly lows under 0.9900
|- US dollar remains weak after NFP, ahead of CPI.
- USDCHF extends its slide after finding resistance again at 1.0150.
- Next critical support is seen around 0.9850.
The USDCHF is falling on Monday for the second day in a row and it dropped to 0.9874, reaching the lowest level since October 27. It is hovering slightly below 0.9900, as the Swiss Franc holds to gains.
The key driver in the USDCHF slide continues to be a weaker US Dollar across the board. The greenback started to decline on Friday, after the US official employment report and amid risk appetite. Now, attention is set on the next inflation numbers due on Thursday with the Consumer Price Index for October that is expected to show a monthly increase of 0.7%.
But on Tuesday, the US holds its midterm elections. Analysts point out that the Republicans have the chance to regain control of Congress. “If Republicans retake one or both chambers of Congress, sweeping fiscal policy changes seem unlikely over the next two years, absent a crisis like the one that occurred in 2020. Under this election outcome scenario, we doubt we would make any major changes to our forecasts for GDP growth, inflation or the federal funds rate as a result of the election. Instead, status quo and political gridlock strike us as the most likely outcomes, with the possibility for some government shutdown/debt ceiling theatrics over the next two years”, said analysts at Wells Fargo.
Critical levels
The short-term bias points to the downside in USDCHF but it needs to break 0.9850 to signal further weakness ahead, targeting 0.9775. On the upside, above 1.0060 the greenback should recover momentum and could test again 1.0150. As long as it remains under 1.0150 gains seem limited.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.