- USD/CHF building up momentum, breaks week high at 0.9700.
- The dollar advances on strong pace despite the grim US employment, manufacturing data.
- USD, about to breach the downtrend resistance line from March 20 highs.
The US dollar has resumed its upside trend against the Swiss franc on Thursday, pushing up beyond the consolidation channel formed during the Asian and European sessions, to stretch beyond the top of the last week’s trading range, at 0.9700. Investors’ fears about the economic consequences of the COVID-19 shutdown and the negative macroeconomic figures around the world are strengthening the greenback higher against its main peers.
The dollar appreciates despite downbeat US data
The grim US jobless claims report, which has shown an increase of 5.2 million of new claims last week and a historic plunge of the Philadelphia Fed Manufacturing Index do not seem to have affected the confidence in the US dollar. The greenback is outperforming its main peers, fuelled by a rush for safety amid growing concerns that the Coronavirus shutdown will trigger a deep global recession.
According to Yohay Elam, Analyst at FXstreet.com, the USD might come out reinforced by this crisis, “The main beneficiary is the US dollar, the safe-haven of choice. While other countries may experience a more moderate decrease in employment, they also depend on the power of the US consumer. Fewer jobs mean lower consumption and collateral damage to the rest of the world.”
USD/CHF: 0.9700 is a key resistance area
The US dollar might gain strength if it confirms above 0.9700. Apart from April 15 high, this is where the downtrend resistance line from March 20 high is located. Once confirmed above here, the pair might encounter resistance at 0.9730/45 (April 8, 9 highs) before approaching the April top at 0.9795. On the downside, immediate support lies at 0.9645 intra-day low, and below here, April 14 low at 0.9590 and March 27 low at 0.9500.
USD/CHF key levels to watch
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