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  • Safe-haven demand boosts CHF, JPY, gold and bonds, Wall Street deep in red.  
  • USD/CHF drops from three-week highs to one-week lows in a few hours.  

The USD/CHF is having the worst performance in three weeks amid risk aversion. Earlier today the pair peaked at 0.9876, the strongest level since early August and then reversed dramatically, falling 150 pips from the top. So far it has been unable to find support and as of writing trades at 0.9742, at the lowest level since last Thursday.  

Swiss franc among top performers  

The escalation in trade tensions between the US and China triggered a sell-off in Wall Street and a rally in bonds. Still, market participants await the response of US President Trump to the announcement of an increase in Chinese tariffs to US products.  

The US yield curve is again inverted. The 10-year yield plummeted from 1.63% to 1.51%, close to YTD lows. In Wall Street, the DOW JONES is falling 1.72% and the NASDAQ 2.39%.  

Today’s event offset Powell’s speech in Jackson Hole and increased expectations about more interest rate cuts from the Federal Reserve. Regarding the greenback, the DXY is down 0.50%, reversing from monthly highs.  

USD/CHF Bias now bearish  

From a technical perspective, USD/CHF broke below the lower limit of an ascendant channel and also under the 0.9770 support area. At the moment is testing 0.9740/45 and below here the not much until 0.9700/05. On the upside 0.9770 has become the immediate resistance.