USD/CHF dives to 4-week lows, around 0.9600 mark amid notable USD supply


  • A combination of factors led to the second straight day of a fall for USD/CHF on Friday.
  • Escalating US-China tensions benefited the safe-haven CHF and exerted some pressure.
  • The prevalent USD selling bias did little to lend any support or stall the ongoing slide.

The intraday USD selling bias picked up pace during the early European session and pushed the USD/CHF pair to near four-week lows, around the 0.9600 mark.

The pair extended the previous day's intraday pullback from the vicinity of a strong horizontal resistance near the 0.9730 region and witnessed some follow-through selling for the second straight session on Friday. The downfall was sponsored by a combination of factors, including the prevalent US dollar selling bias and reviving safe-haven demand for the Swiss franc.

The greenback remained depressed on the back of Thursday's dismal US GDP print, which showed that the economy contracted by 5% annualized pace during the January-March quarter. This coupled with a fresh leg down in the US Treasury bond yields further undermined the USD demand, which, in turn, was seen as one of the key factors that kept exerting some pressure on the USD/CHF pair.

Meanwhile, investors remain concerned about a further escalation in diplomatic tensions between the United States and China, especially after the latter moved to tighten control over the city of Hong Kong. The development weight on investors' sentiment, which was evident from a weaker tone around the equity markets and benefitted traditional safe-haven currencies, like the CHF.

It is worth reporting that China's parliament on Thursday endorsed a national security law for Hong Kong. Hence, the key focus will remain on the US President Donald Trump's news conference later this Friday. Given that China has threatened to retaliate with countermeasures to any US actions, Trump's reaction will play a key role in influencing the broader market risk sentiment and provide a fresh directional impetus to the USD/CHF pair.

In the meantime, a slew of US macro data will be looked upon for some short-term trading impetus later during the early North American session. Friday's US economic docket features the release of Core PCE Price Index, Personal Income/Spending data and Goods Trade Balance figures, which will be followed by Chicago PMI and revised Michigan Consumer Sentiment Index.

Technical levels to watch

USD/CHF

Overview
Today last price 0.9612
Today Daily Change -0.0030
Today Daily Change % -0.31
Today daily open 0.9642
 
Trends
Daily SMA20 0.9698
Daily SMA50 0.9701
Daily SMA100 0.9685
Daily SMA200 0.9783
 
Levels
Previous Daily High 0.9719
Previous Daily Low 0.9631
Previous Weekly High 0.9761
Previous Weekly Low 0.9638
Previous Monthly High 0.9803
Previous Monthly Low 0.9595
Daily Fibonacci 38.2% 0.9665
Daily Fibonacci 61.8% 0.9685
Daily Pivot Point S1 0.9608
Daily Pivot Point S2 0.9575
Daily Pivot Point S3 0.952
Daily Pivot Point R1 0.9697
Daily Pivot Point R2 0.9752
Daily Pivot Point R3 0.9786

 

 

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