USD/CHF rejected just above 0.9600, approaches June lows

  • Stocks in Wall Street rebound back to positive.
  • US Dollar Index drops to weekly lows during the American session.
  • USD/CHF heads for the lowest daily close in two months.

The USD/CHF dropped to 0.9541 in American hours, hitting a fresh daily low. Earlier the pair peaked at 0.9620 before turning to the downside amid a weaker US dollar.

The greenback failed to hold onto gains as Wall Street rebounded back to positive territory. The improvement in market sentiment weighed on the dollar. The US Dollar Index has fallen 0.37% and trades at 103.75, the lowest level in a week. The US 10-year yield stands at 3.19% and the 30-year at 3.31%.

The Swiss franc remains strong as it has been the case since the Swiss National Bank rate hike 11 days ago. Sight deposits held at the SNB fell last week by the largest amount in more than then years, suggesting the end of interventions in the currency market to curb franc’s strength.

Economic data from the US came in above expectations on Monday. Durable Goods Order rose by 0.7% in May. Above the 0.1% expected. Pending Home Sales climbed unexpectedly by 0.7%. The numbers did not help the greenback. The key data of the week will be the Core PCE on Thursday. In Portugal, the annual European Central Bank forum starts on Monday; on Wednesday a discussion panel will include Lagarde (ECB), Powell (Fed) and Bailey (BoE).

Bearish bias

The USD/CHF continues to move with a bearish bias. The failure to hold above 0.9600 confirms the momentum. As of writing, the pair is testing levels under 0.9550. If it consolidates clearly below, more losses seem likely. The next target might be located at the 100-day Simple Moving Average at 0.9505.

A recovery above 0.9620 should face resistance at 0.9680, followed by 0.9715 (20-day SMA).

Technical levels

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