- Swiss franc gains after a three-day rally in USD/CHF.
- US Dollar drops against European currencies and the yen, amid a decline in Wall Street and lower yields.
The USD/CHF pair erased yesterday’s gains and is back under 0.9800. It is correcting lower after siring during there consecutive days. The rally of the pair was capped by the 0.9815/20 and also by the 20-day moving average.
Markets remain with caution amid expectation of slower global growth. Safe-haven assets, like the Japanese Yen, gold and bonds outperformed others. Also, the Italian political chaos contributes to the negative outlook.
“Sovereign bonds climbed with safe debt trimming yesterday’s fall. U.S. President Trump added more pressure on the Fed to cut rates by at least 100 bps, ahead of the Jackson Hole gathering on Friday, while political uncertainties in the Eurozone supported the rallying of the 10Y German bund. With regard to peripheral bonds, Italy’s bonds recovered from early losses after the resignation of its PM Conte. Italy’s risk premium narrowed as an alternative coalition is still an option to avoid a snap elections”, wrote BBVA analyst.
USD/CHF momentum eases
The peaked at 0.9820 yesterday, the strongest level in two weeks. As of writing trades at 0.9779, after reaching a daily low at 0.9774. The rally lost strength today after finding resistance around the 20-day moving average around 0.9805.
The correction so far found support at 0.9775, where a short-term uptrend stands. A consolidation below would weaken the bullish tone of the greenback. Support levels might be located at 0.9765 and 0.9735.
More Levels
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