USD/CHF plummets more than 200 pips as US dollar tumbles

US dollar tumbles as bonds rise sharply.
BoE buys bonds, triggers global rebound in stocks and commodities.
USD/CHF accelerates correction from three-month highs.

Matías Salord FXStreet

The USD/CHF dropped sharply from the highest level in three months, near the parity area and bottomed at 0.9743, a one-week low. The pair remains below 0.9800 with a negative tone as the US dollar slides across the board.

The greenback weakened amid a rally in Treasuries and in equity markets. The announcement of the Bank of England buying gilts triggered sharp moves and activated a recovery in bonds. The BoE said it purchased on Wednesday £1.025B of gilts. US yields pulled back sharply from multi-year highs. The US 10-year yield dropped from above 4.00% to 3.76%.

The Swiss franc also rose versus the euro and the pound favored by the moves in the bond market.

Double top at 0.9960 and collapses

The USD/CHF rose earlier to test Monday’s top at 0.9965 and failed to break it, and then retreat sharply breaking below 0.9860, confirming a double top formation. The target of the formation is around 0.9730, near Wednesday’s low at 0.9744. A few pips below, awaits the 20-day Simple Moving Average at 0.9725.

A daily close under the 20-day SMA could change the bearish short-term bias to neutral or bearish. The US dollar needs to recovers levels above 0.9880 in order to strengthen again.

Technical levels

USD/CHF

Overview
Today last price	0.9792
Today Daily Change	-0.0126
Today Daily Change %	-1.27
Today daily open	0.9918

Trends
Daily SMA20	0.9727
Daily SMA50	0.964
Daily SMA100	0.9685
Daily SMA200	0.9503

Levels
Previous Daily High	0.9947
Previous Daily Low	0.9849
Previous Weekly High	0.9851
Previous Weekly Low	0.962
Previous Monthly High	0.9808
Previous Monthly Low	0.9371
Daily Fibonacci 38.2%	0.9886
Daily Fibonacci 61.8%	0.991
Daily Pivot Point S1	0.9862
Daily Pivot Point S2	0.9807
Daily Pivot Point S3	0.9764
Daily Pivot Point R1	0.996
Daily Pivot Point R2	1.0003
Daily Pivot Point R3	1.0059

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.

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