- The USD/CHF bounces off eight-day low to confront key resistance-joint.
- The quote seems to stabilize after the largest losses in nearly three months.
- Risk sentiment stays sluggish amid global trade pessimism.
USD/CHF takes the bids to 0.9917 during the Asian session on Tuesday. The pair dropped the highest since September while testing an eight-day low during the previous day. Trade war risk and downbeat data from the United States (US), a contrast to the Swiss numbers, seem to be the main catalysts till now.
The US-led trade protectionism is back in focus as the Trump administration recently unveiled actions/statements to disappoint traders from South America, China and the European Union (EU). While the slump in local currencies compared to the US dollar (USD) was spotted as the reason for steel tariffs on Argentina and Brazil, the World Trade Organization’s verdict on Airbus helped the US to signal further tariffs on the EU automakers. Elsewhere, the US Trade Secretary Wilbur Ross kept the door open for December 15 tariffs on China if the phase-one trade deal doesn’t happen between now and then.
This dilutes the market’s risk tone and dragged Wall Street south whereas the US 10-year Treasury yields and S&P 500 Futures have recently followed the suit with mildly negative prints.
On the economic calendar, the US ISM Purchasing Managers’ Index (PMI) came in below 50.00 for the fourth consecutive month while second-tier activity and retail sales data from Switzerland grew beyond marked consensus.
It’s worth mentioning that the US President Donald Trump’s push for easy money policy seems to be largely ignored as the US Federal Reserve (Fed) policymakers are on the blackout period.
Looking forward, Swiss Consumer Price Index (CPI) data for November, expected -0.1% for both MoM and YoY versus -0.3% and -0.2% respective priors, seems to be the immediate catalyst. Though, trade/political headlines’ ability to trigger broad moves can’t be undermined.
Technical Analysis
Should prices manage to bounce back beyond 0.9918/20 region including 100 and 200-day Exponential Moving Averages (EMAs), November 26 low near 0.9955 and an early-November high near 0.9980 will return to the charts. Alternatively, an upward sloping trend line since October 18, at 0.9883, offers strong downside support.
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
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.