- USD/CHF attracts some dip-buying near the 0.9600 mark, albeit lacked follow-through.
- The upbeat market mood undermined the safe-haven CHF and extended some support.
- The prevalent offered tone surrounding the USD capped any strong gains for the major.
The USD/CHF pair refreshed daily tops, around the 0.9635 region in the last hour, albeit lacked any strong follow-through.
The pair quickly reversed an early European session dip to the 0.9600 neighbourhood and was now looking to build on the previous day's intraday recovery move from two-month lows. The easing of lockdown restrictions in major economies raised hopes for global economic recovery and boosted investors' confidence.
The upbeat market mood, as depicted by the ongoing positive move across the global equity markets, dented demand for traditional safe-haven currencies, including the Swiss franc. The CHF was further undermined by worse-than-expected Swiss GDP report, which showed that the economy contracted by 2.6% during the first quarter of 2020. Adding to this, the GDP fell 1.3% year-on-year as compared to a 0.9% growth anticipated.
This, in turn, extended some support to the USD/CHF pair, albeit the prevalent US dollar selling bias kept a lid on the attempted positive move. The greenback extended its downfall for the seventh session in a row on Wednesday and dragged the US Dollar Index to its lowest level since mid-March, around the 97.40 region.
A broad-based USD weakness seemed to be the only factor holding investors from placing any bullish bets and capping the upside for the USD/CHF pair. Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have bottomed out and positioning for any meaningful recovery move. On the downside, the USD/CHF pair has been showing some resilience below the 0.9600 mark, also warranting some caution for bearish traders.
Moving ahead, market participants now look forward to the US macro data for some short-term trading opportunities. Wednesday's US economic docket highlights the release of the ADP report on private-sector employment and the ISM Non-Manufacturing PMI, which might influence the USD price dynamics and provide a fresh impetus.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
GBP/USD consolidates above 1.2500, eyes on US PCE data
GBP/USD fluctuates at around 1.2500 in the European session on Friday following the three-day rebound. The PCE inflation data for March will be watched closely by market participants later in the day.
Gold clings to modest daily gains at around $2,350
Gold stays in positive territory at around $2,350 after closing in positive territory on Thursday. The benchmark 10-year US Treasury bond yield edges lower ahead of US PCE Price Index data, allowing XAU/USD to stretch higher.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.