USD/CHF drops toward 0.9000 as USD selloff continues
- USD/CHF looks to close second straight day in the negative territory.
- US Dollar Index fell below 90.50 after US data.
- Wall Street's main indexes post impressive gains on Friday.
The USD/CHF pair extended its daily slide during the American trading hours and touched a daily low of 0.9013. As of writing, the pair was trading at 0.9028, down 0.35% on a daily basis.
The sharp upsurge witnessed in Wall Street's main indexes weighed on the greenback in the second half of the day and forced USD/CHF to continue to push lower. At the moment, the S&P 500 Index is rising 1.1% on a daily basis and the US Dollar Index is losing 0.4% at 90.35.
The data from the US showed on Friday that Retail Sales in April remained unchanged at $619.9 billion. Furthermore, the US Federal Reserve reported that Industrial Production expanded by 0.7%, compared to analysts' estimate of 1%, and the University of Michigan's Consumer Sentiment Index dropped to 82.8 from 88.3. Nevertheless, these uninspiring figures were largely ignored by market participants
Meanwhile, the 10-year US Treasury bond yield is falling 1% on the day, not allowing USD/CHF to stage a rebound ahead of the weekend.
USD/CHF outlook
Credit Suisse analysts think that a sustained move back below 0.9030 would confirm a near-term peak for USD/CHF. "Thereafter, the next levels are seen at 0.9000/8985, which stalled the market on Monday, then 0.8922/10, before 0.8871/62, which is an important price low," analysts added. "Resistance stays at the 200-day average at 0.9083/9115, which should now ideally cap to keep the risks directly lower. Above here, the next levels are seen at 0.9165.”
Additional levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
