- 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
|Today last price||0.9612|
|Today Daily Change||-0.0030|
|Today Daily Change %||-0.31|
|Today daily open||0.9642|
|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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