USD/CHF breaks the 1.0050 barrier and hits 1-month lows

Swiss Franc extends gains across the board even after US Dollar reversal.
USD/CHF having the worst performance in months heads for the lowest close since mid-April.

Matías Salord FXStreet

The USD/CHF was falling modestly on Thursday amid increasing demand for safe-haven assets. Recently it accelerated to the downside on the back of a sharp decline of the US Dollar across the board. The DXY dropped from multi-week highs back to the 98.00 area erasing important daily gains.

The greenback lost strength and reversed sharply following the release of weaker-than-expected US data and amid concerns about the US-China trade war. The Swiss Franc is being supported by the ongoing Brexit drama, the weak EZ data and also the trade war worries.

Against the Euro, the Swiss franc reached today the highest level in a month and moved closer to the 2019 and 2018 lows. While versus the US dollar is having the biggest daily gain in months.

The USD/CHF broke below 1.0065 first and then the 1.0050 zone that capped the decline last week. As of writing, trades at the lowest since April 16 at 1.0039, down almost 60 pips for the day. Short-term technical indicators favor further losses.

“On the back of resurfacing US-China trade tensions, CHF has been slow to appreciate - with USDCHF declining 1% off the 1.0230-40 resistance level. When compared to a 2.5% drop in USDJPY, this suggests that there is some upward stickiness in USDCHF. This could be due to perceived softness in Euro area sentiment. Nonetheless, we like the CHF from a haven perspective”, said Jeremy Stretch and Bipan Rai analysts at CIBC.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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