- USD/CHF extended this week’s sharp pullback from the parity mark.
- Trade uncertainty continued benefitting the CHF’s safe-haven status.
- Investors now look forward to the US macro data for a fresh impetus.
The USD/CHF pair witnessed some follow-through selling for the third consecutive session on Wednesday and dropped to over one-month lows, around mid-0.9800s in the last hour.
The pair extended this week's rejection slide from the key parity mark and continued losing ground through the early European session on Wednesday. Persistent trade uncertainty continued underpinning the Swiss franc's perceived safe-haven status and kept exerting downward pressure on the major.
Weighed down by escalating US-China tensions
In the latest trade development, the US President Trump on Tuesday indicated that a deal with China may not come until after the 2020 US presidential election and triggered a fresh wave of the global risk-aversion trade. The already weaker sentiment deteriorated further amid escalating tensions over the passage of Hong Kong and Xinjiang bills.
It is worth recalling that the US Congress overwhelmingly approved a bill condemning China’s mass detention of ethnic Muslims in the western region of Xinjiang. This comes after Trump last week signed a bill supporting Hong Kong’s pro-democracy protesters and was further seen as yet another setback to the trade negotiations.
Meanwhile, a subdued US dollar demand, though the downside remained limited amid stability in the US Treasury bond yields, did little to stall the pair's ongoing downfall to the lowest level since early-November. It will now be interesting to see if the pair is able to find any support at lower levels as the focus now shifts to the US macro data.
Wednesday's US economic docket features the release of ADP report on private-sector employment and the ISM Non-Manufacturing PMI, which might influence the USD price dynamics and contribute towards producing some short-term trading opportunities later during the early North-American session.
Technical levels to watch
|Today last price||0.9856|
|Today Daily Change||-0.0017|
|Today Daily Change %||-0.17|
|Today daily open||0.9873|
|Previous Daily High||0.9927|
|Previous Daily Low||0.9857|
|Previous Weekly High||1.0024|
|Previous Weekly Low||0.9954|
|Previous Monthly High||1.0024|
|Previous Monthly Low||0.985|
|Daily Fibonacci 38.2%||0.9884|
|Daily Fibonacci 61.8%||0.99|
|Daily Pivot Point S1||0.9844|
|Daily Pivot Point S2||0.9816|
|Daily Pivot Point S3||0.9774|
|Daily Pivot Point R1||0.9914|
|Daily Pivot Point R2||0.9956|
|Daily Pivot Point R3||0.9984|
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