USD/CHF remains in red near mid-0.98s ahead of US data

USD struggles to find demand on Monday, DXY tumbles below 94.
High risk-appetite limits USD/CHF's losses.
Wall Street opens higher.

Eren Sengezer FXStreet

Last Friday, the USD/CHF pair recorded its fourth straight negative weekly close and failed to make a recovery in the first trading day of the new week. After refreshing its daily low at 0.9830 before American traders hit their desks, the pair erased a portion of its losses in the last hour and was last seen trading at 0.9855, where it was down 0.25% on the day.

The pair's slump on Monday seems to be caused by a weaker USD rather than a strong CHF. Despite the upbeat employment data released from the US on Friday, the US Dollar Index opened on a weak note and eased below the 94 handle. Ahead of the factory orders and the ISM-NY Business Conditions index data, the index is at 93.84, losing 0.34%.

Meanwhile, the improved market sentiment, as seen via the strong performance of major global equity indexes, is making it difficult for the traditional safe-haven CHF to strengthen further. Both the Dow Jones Industrial Average and the S&P 500 started the day higher and was last seen adding 0.65% and 0.4% respectively. Furthermore, the 10-year US T-bond yield is up 0.7% at 2.915%.

Technical levels to consider

0.9830/25 (daily low/May 31 low) could be seen as the initial support followed by 0.9800 (psychological level/100-WMA) and 0.9770 (Apr. 24 low). On the upside, resistances are located at 0.9910 (Jun. 1 high) 1.0000 (psychological level/parity) and 1.0055 (May 10 high).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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