USD/CHF Consolidates Around 0.90 with Uncertainty Remaining High
USD/CHF fell below 0.90 late last week, but it stopped at the 50 daily SMA which turned into support and began to rise again this week. However, the uncertainty is high and neither buyers nor sellers want to take charge yet and the price is hanging around the 0.90 level.
This currency pair remained bullish for more than two months until the end of October, since reversing from the lows around 0.8550s in July. This rebound has been spurred in large part by a positive rise in US bond rates but in the last two weeks, we have seen a retreat in the US Treasury yields, which have weighed on the USD.
Buyers sent USD/CHF up to 09250 but then we saw another reversal, this time lower as the conflict in Gaza started. The CHF has benefitted from safe haven status since early October, which has been the reason for the retreat lower in this pair, below 0.89, although the 100 SMA (green) held as support on the daily chart and we saw a rebound off that moving average, with safe havens pulling back lower as the conflict didn’t spread further in the Middle East.
Tensions have had a detrimental influence on mood, and risk assets have been retreating while safe havens have risen, resulting in a decrease in this currency pair. But, for the time being, traders are uncertain considering the different issues that might affect this pair, such as the economic data from the US, the actions and rhetoric from the FED and the Swiss National Bank, as well as geopolitics.
The Swiss CPI recently increased, although the inflation rate remains comfortably within the SNB’s 0-2% target area for both the headline and core measures. The market no longer expects the SNB to raise interest rates. We saw another reversal lower late last week, as the FED didn’t hint on another rate hike in December and the employment reports from the US came in weaker than expected. But, the 50 SMA (yellow) turned into support this time which is holding the price. So, for the time being there’s no clear direction for this pair.
USD/CHF Live Chart
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