Brocker.Org: USD/CHF well-offered for third straight session, hits one-week low


Having failed to build on early recovery move further beyond the parity mark, the USD/CHF pair ran through fresh offers and has now dropped to one-week low near 0.9980-75 region. 

Spot extended last week’s sharp reversal move from the vicinity of the 1.0100 handle, one month highs, and remained under some selling pressure for the third consecutive session amid persistent US Dollar weakness, against the backdrop of Friday’s weaker monthly retail sales and inflation figures. 

   •  US: Retail sales were softer than expected in April – Natixis

Last week’s disappointing US macro data seems to have dampened outlook for an aggressive Fed rate-tightening cycle through 2017 and was seen weighing on the greenback through mid-European session on Monday. Market participants, however, seemed convinced that the Fed would eventually move towards raising interest rates at its June meeting, which might collaborate towards limiting any further downslide for the major. 

Meanwhile, market seems to have largely ignored disappointing release of Swiss PPI print for April, while a mildly negative sentiment surrounding European equity markets extended support to the Swiss Franc’s safe-haven appeal and collaborated to the pair’s downslide. 

Traders now shift their focus to the US economic docket, featuring the release of Empire State Manufacturing Index, for some fresh impetus during early NA session. 

   •  USD/CHF dips should hold near 0.9950 – Commerzbank

Technical levels to watch

Immediate support is pegged near 0.9865-60 area, below which the downward trajectory could get extended towards 0.9830 horizontal support ahead of the 0.9800 handle. On the flip side, any recovery move now seems to confront fresh supply near the parity mark, above which a bout of short-covering could lift the pair back towards 1.0035-40 intermediate resistance en-route a major hurdle near 1.0075 region.