- USD/CHF failed to capitalize on its early uptick amid a broad-based USD weakness.
- The USD bulls failed to gain any respite from Thursday’s mixed US macro releases.
- Worsening US-China relations benefitted the safe-haven CHF and weighed further.
- The upbeat mood in the equity markets helped limit deeper losses, at least for now.
The USD/CHF pair retreated around 40 pips from the mid-European session swing high and refreshed daily lows, around the 0.9680 region in the last hour.
The pair failed to capitalize on its attempted intraday positive move, instead met with some fresh supply near the 0.9720 region amid some renewed US dollar selling bias. The already weaker sentiment surrounding the greenback deteriorated further after the first revision of the US GDP came in to show a contraction of 5.0% in the January-March period as compared to 4.8% estimated previously.
The dismal GDP print was accompanied by slightly higher-than-expected Initial Weekly jobless claims, which showed over 2.1 million Americans filed for unemployment-related benefits during the week ending May 23rd. Separately, Durable Goods Orders slumped by 17.2% MoM in April. The reading was better than consensus estimates, albeit did little impress bulls or provide any immediate respite to the USD.
Apart from a broad-based USD weakness, concerns about a further escalation in diplomatic tensions between the United States and China further benefitted the Swiss franc's perceived safe-haven status. However, the upbeat market mood around the equity markets, supported by the optimism over a potential COVID-19 vaccine and hopes of a global economic recovery, might help limit deeper losses for the pair.
Looking at the broader picture, the USD/CHF pair has been oscillating well within a broader trading range since the beginning of May. This makes it prudent to wait for a sustained breakthrough in either direction before traders start positioning for the pair's near-term trajectory.
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 stays below 1.0700 after US data
EUR/USD stays in a consolidation phase below 1.0700 in the early American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold trades on the back foot, manages to hold above $2,300
Gold struggles to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to reverse its direction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.