USD/CHF spikes to 0.9550 and retreats to 0.9450
- Swiss franc drops versus the US dollar despite risk aversion.
- Wall Street tumbles: Dow Jones drops more than 8%, oil down 5%.
The USD/CHF pair is up for the day but it is off highs. Earlier on Thursday, amid a rally of the US dollar jumped to 0.9550, reaching the highest level in a week. It then pulled back and near the end of the session trades around 0.9450, up 60 pips for the day.
It is another turbulent day in Wall Street but this time the US dollar was the main safe-haven. The greenback rose across the board and even against the Swiss franc and the yen. The DXY peaked at 98.30 and then pulled back to 97.45.
The greenback moved off highs and Wall Street trimmed losses after the Federal Reserve announced it would offer 1.5 trillion dollar in short-term loans to banks today and on Friday. The recovery in stocks was short-lived and main indexes resumed its fall. Markets are on panic mode triggered by the coronavirus impact on the economy.
From a technical perspective, the outlook in USD/CHF is still bearish on a wider view but in the short-term it is not clear. The greenback has recovered significantly from Monday’s low. To the upside, a consolidation above 0.9530 would strengthen the US dollar; above the next critical resistance is seen at 0.9615/25. Volatility is likely to remain elevated favoring exacerbated moves. On the downside, 0.9395 is the first support followed by 0.9320.
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Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
