USD/CHF tumbles from 1.000 to 6-day lows, amid US dollar weakness

USD/CHF falls almost 80 pips in a few hours amid a sharp decline of the greenback.
US dollar heads for the lowest close since October 10.
Fed’s Chairman comments on rates triggered a decline of the US dollar.

Matías Salord FXStreet

The USD/CHF pair reached earlier today weekly highs, slightly above 1.000. It failed to extend gains above the parity level and then plummeted, erasing five days of gains in a few minutes. The pair bottomed at 0.9924, a 6-day low.

Near the end of the session is trading at 0.9930, consolidating most of the day’s losses and it is about to post the lowest daily close since mid-October. Again, the 0.9900 area seems to be exposed.

The move lower took place amid a sharp slide of the greenback after Powell’s comments. The Fed’s Chairman said at the Economic Club of New York said that the policy rate was just below the neutral rate. Rate hike expectations for next year dropped significantly and weakened the US dollar, boosting equity prices in Wall Street.

USD/CHF Technical outlook

Today’s slide ends several days of correction and could point to another leg lower. A slide below 0.9900 could trigger the next move to the downside. The next strong support is seen at 0.9850/55.

The reversal in USD/CHF took place from a strong resistance level around 1.0000. It is a psychological area, also the 20-day moving average and a horizontal level. A daily close above would have been a positive technical development for the US dollar, but the failure puts the pair again under bearish pressure.

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.

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