- USD/CHF remains in the green as CHF struggles to find demand in the NA session.
- After a mixed start to the day, major equity indexes in the U.S. are gathering strength.
- DXY looks to close the third day in a row with losses.
The USD/CHF pair tumbled to a fresh daily low at 0.9840 at the start of the American session and recorded a modest recovery before going into a consolidation phase near mid-0.98s. As of writing, the pair was trading at 0.9850, adding only 5 pips on the day.
The pair’s price action is dominated by the greenback fluctuations on Wednesday. Following a batch of mixed macroeconomic data releases from the United States, the US Dollar Index, which ended the first two trading days of the week with losses, extended its downside to a fresh 2-week low at 93.38. Although the trade deficit in the United States shrunk more than expected in April, the Q1 nonfarm productivity came in at 0.4% to fall short of the experts’ estimate of 0.6%.
In the meantime, Wall Street started the day in a mixed manner with the Nasdaq Composite Index and the S&P 500 recording losses and the Dow Jones Industrial Average sticking to small gains. However, all major indexes were able to gain traction with the market sentiment improving in the last couple of hours, which also made it difficult for the traditional safe-haven CHF to gather further strength against the buck.
The next data of relevance for the pair will be the May unemployment rate from Switzerland, which is expected to ease to 2.6% from 2.7%.
Technical levels to consider
The immediate support for the pair could be seen at 0.9830/25 (Jun. 5 low/May 31 low) before 0.9800 (psychological level/100-WMA) and 0.9770 (Apr. 24 low). On the upside, resistances are located at 0.9910 (Jun. 1 high), 1.0000 (psychological level/parity) and 1.0055 (May 10 high).
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