USD/CHF remains shy of 1.0000 amid latest risk aversion wave


  • The Swiss Franc (CHF) benefited from the US-China tussle over the Hong Kong bill.
  • Uncertainty surrounding Brexit, doubts over global growth adds to the risk-off mood.
  • US data, Fedspeak and trade/political headlines will be the key to follow.

With the latest risk aversion supporting the Swiss Franc, USD/CHF pulls back to 0.9980 by the press time of early Wednesday.

Among many, the key reason for the present risk-off can be ascertained to the US-China tussle over the Hong Kong bill that was recently passed by the United States’ (US) House of Representatives. Even if the same is yet to cross the Senate in order to become a law that requires the US to check Hong Kong’s sovereignty on an annual basis, China has already warned its to-be trading partner to stay away from internal matters.

The bill is likely to add to the fears of another failed round of trade talks between the US and China, which in turn could weigh on the global economy. It should be noted that the International Monetary Fund (IMF) recently cut down global growth forecast to the lowest since the Great Financial Crisis (GFC) citing trade pessimism as the key reason.

Other than trade worries, doubts over the Brexit, expectations of further easing by China and a rate cut from the Bank of Korea, add weakness to the pair.

Traders will now keep a close tab on the trade/political headlines while also not missing on the US Retail Sales and Fedspeak for predicting near-term pair moves.

Technical Analysis

FXstreet Analyst Haresh Menghani holds near-term bullish bias considering a two-month-old rising channel. However, chances of immediate pullback can’t be denied:

"Given the pair's repeated bounce from a support marked by the lower end of a two-month-old ascending trend-channel, the near-term bias remains tilted in favour of bullish traders. Moreover, technical indicators on hourly charts have been losing positive momentum but maintained their bullish bias on the daily chart, supporting prospects for some dip-buying interest. Hence, any meaningful slide might still be seen as an opportunity to initiate some fresh bullish positions near the mentioned trend-channel support, currently near the 0.9935 region. Meanwhile, a sustained strength beyond the parity mark might prompt some technical buying and accelerate the momentum further towards the recent swing highs near the 1.0025-30 region."

 

 

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex News

Editors’ Picks

EUR/USD: Bulls in control above 1.1100 starting out ECB week

Following the bounce from near 1.1100 in early Asia, EUR/USD has entered a phase of consolidated near 1.1140 region ahead of the European open. Bulls await a fresh impetus for the next push above the 1.1150 mark ahead of Eurozone/ US PMIs.

EUR/USD News

GBP/USD recedes from three-week top above 1.2400, UK Manufacturing PMI eyed

GBP/USD prints three-day winning streak amid broad US dollar weakness. Calls of further help to British employees add to the upside momentum. Downbeat Brexit headlines confront the UK’s coronavirus optimism. The UK/US PMIs will join qualitative catalysts.

GBP/USD News

FX Today: USD hit by escalating US riots, risk-on mood; US ISM PMI eyed amid light trading

The US dollar took a beating across the board starting out a new month/ week, as markets breathed a sigh of relief on the US’ softer stance on China. The dollar weakness was also backed by the escalating riots in the US cities, with curfews imposed on major cities. 

Read more

Gold: Teasing a rectangle breakout, $1750 in sight

Gold bulls gathering pace for the next push higher. The extension of last week’s rally in the yellow metal is mainly driven by the sell-off in the US dollar across the board, in the wake of US-China trade war relief and escalating US riots.

Gold News

WTI: Overbought RSI challenges the bulls above $35.50

WTI seesaws around 7-week-old resistance line, retreats from highest since March 11. A short-term ascending trend line on the bears’ radars during the pullback. 100-day SMA, 61.8% Fibonacci retracement together offers strong upside barrier.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures