USD/CHF drops to four-week lows, approaches critical support
- The Swiss franc remains supported by the risk aversion environment.
- US dollar resumes slide against European currencies as US yields tumble.
The USD/CHF has continuously been falling since Monday. During Tuesday’s American session, the negative momentum continued to prevail. Recently it bottomed at 0.9856, the lowest level since November 4.
More USD weakness
Over the last hours, the US dollar accelerated the decline versus European currencies amid lower US yields. The 10-year yield fell from 1.84% to 1.70%, reaching the lowest since early November. At the same time, the US Dollar Index (DXY) also hit monthly lows, approaching 97.50. The index is falling for the third day in a row extending the reversal from 98.50.
A stronger Swiss franc also drove the decline in USD/CHF. The risk aversion tone across markets, triggered by concerns about global trade boosted CHF. The EUR/CHF pair trades at the highest in two months.
Eyes on October lows
On Friday, USD/CHF tested near parity the highest level since June, but it failed to break above and now it is approaching the 0.9840/50 area (October and November lows). A break lower would clear the way to more losses, probably targeting 0.9805.
On the upside, the greenback needs to recover levels above 0.9930 (20-day moving average) to remove the short-term negative bias.
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.
