USD/CHF extends losses and approaches two-month lows at 0.9030
- US dollar resumes its near-term downtrend and approaches two-month lows at 0.9030.
- The dollar loses ground with stock markets rallying.
- USD/CHF: Below 0.9048, next target is 0.8998 – Commerzbank.
The dollar has resumed its downtrend against the Swiss franc on Thursday, breaking below the 0.9100 level to reach session lows dangerously close to the last two-months’ low, at 0.9030.
US dollar tumbles on risk appetite
The greenback has depreciated about 0.8% so far today amid a broad-based USD weakness with equity markets surging as Democrat Joe Biden takes the lead on the US elections’ vote count. The perspective of a Democrat government with the Senate controlled by the Republicans to block attempts to introduce tighter regulations or raise taxes has boosted investors optimism.
Furthermore, the Federal Reserve, which has kept interest rates and the bond-buying program unchanged, as expected, has added a slight negative pressure on the USD. Fed Chair Jerome Powell’s has warned that the pace of improvement has moderated and that the path ahead is uncertain, which might have been considered as tilted to the dovish side.
USD/CHF to target recent low at 0.8998 on a slump below 0.9048 – Commerzbank
On the technical front, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, warns that a clear breach of 0.9048 might accelerate the downtrend: “Attention on the 0.9048 mid-September low. Only a slide below 0.9048 will target the 0.8998 recent low. The recent low at 0.8998 guards 0.8943 (TD support). Failure at 0.8943 is needed to introduce scope to the 0.8703/0.8698 2014 lows.”
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
