- US 10-year T-bond yields continue to fall.
- The US Dollar Index remains below mid-93s.
- USD/CHF looks to end the day at its lowest level since late April.
After making a modest recovery on the back of an improved market sentiment on Wednesday, the USD/CHF lost its traction, once again, today and plummeted to its worst level since April 25 at 0.9803. With the greenback staying under pressure in the NA sesssion, the pair is having a difficult time retracing its losses and was last seen trading at 0.9815, where it was down 0.5% on the day.
The primary reason behind the USD weakness seems to be the rising expectations of the ECB announcing a QE exit strategy next week.
On the other hand, the high risk-appetite, which didn’t allow the CHF to stay resilient against the buck yesterday, seems to have lost its dominance over the price action on Thursday. After recording decisive gains yesterday, major equity indexes in the United States are staying mixed while the 10-year T-bond yield is down nearly 1% on the day, helping the safe-havens stay strong.
Meanwhile, today’s data from Switzerland showed that the unemployment rate eased to 2.6% in May from 2.7% to meet the market consensus.
Technical outlook
The pair could encounter the first support at 0.9800 (psychological level/100-WMA/daily low) ahead of 0.9770 (Apr. 24 low) and 0.9710 (Apr. 29 low). On the upside, resistances align at 0.9910 (Jun. 1 high), 1.0000 (psychological level/parity) and 1.0055 (May 10 high).
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