- The USD/CHF fails to break beyond 0.9530 resistance area and dives to 0.9460 lows.
- The dollar loses ground and end of quarter moves and an improved market mood.
- USD/CHF: Below 0.9425/20 the downtrend might accelerate – Credit Suisse.
The dollar has given away most of the ground gained on Monday as the pair’s reversal from 0.9530 resistance area extended to session lows at 0.9460. The moderate improvement in market sentiment and end-of-quarter portfolio rebalancing are hurting the USD which has depreciated against its main rivals.
US dollar dives as market sentiment improves
The greenback has been rejected at 0.9530 on Tuesday, before the sharp pullback witnessed during the US afternoon session. The brighter market mood, with US equity indexes reaching session highs as Wall Street closes its best quarterly performance in decades, has boosted appetite for risk, weighing on the safe-haven USD.
The market has ignored the positive US macroeconomic data, with the Consumer confidence improving to 98.1 in June, beating market expectations of 91, from the 85.9 reading posted in May.
USD/CHF: Important support at 0.9425/20 – Credit Suisse
The FX Strategy Team at Credit Suisse expects USD weakness to resume and points out to the 0.9425/20 a key level to accelerate the downtrend, we look for weakness to resume, with support seen initially at 0.9508, then 0.9479, ahead of 0.9442/33 and 0.9425/20, where we expect to see a first attempt to hold. Removal of here would then expose the current June low at 0.9376, beneath which would see the recently completed ‘hammer’ candlestick negated and we would then expect to see another leg lower. Support is seen thereafter at the 78.6% retracement of the March 2020 surge at 0.9337/21, where we also could see fresh buyers at first.”
USDS/CHF key levels to watch