The USDCHF has moved downwards towards the 0.8950 mark due to a lack of confidence in the USD Index’s potential for a rebound.

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• USD/CHF has stretched its downside to near 0.8950 amid a lack of conviction in the USD Index for a recovery.

The pair currently trades last at 0.89386.

The previous day high was 0.9013 while the previous day low was 0.8944. The daily 38.2% Fib levels comes at 0.8987, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8971, expected to provide resistance.

The USD/CHF pair has dropped further to near 0.8950 in the European session. The Swiss Franc asset has faced an immense sell-off amid weakness in the US Dollar Index (DXY). The USD Index has turned sideways after correcting from 103.16 as investors have started digesting the consequences of higher interest rates from the global central banks.

S&P500 futures are holding nominal losses in London, portraying a risk-off mood, as investors are taking caution ahead of the second quarterly result season in the United States for the financial year 2023. Investors are expecting weak numbers from banking stocks due to tight credit conditions and weak guidance from technology stocks amid a high-interest rate environment.

The USD Index is oscillating in a narrow range of around 102.76 after a corrective move. Sheer volatility is anticipated after the release of the US Durable Goods Orders data (May). As per the consensus, the economic data is seen contracting by 1.0% vs. an expansion of 1.1%. Durable Goods Orders excluding defense are seen as stagnant against a contraction of 0.7%.

Scrutiny of the forward economic data indicates that fewer defense orders are going to impact the economic indicator.

On the Swiss Franc front, the Swiss National Bank raised interest rates by 25 basis points (bps) last week to 1.75% in order to keep inflation restricted below or around 2%. SNB Chairman Thomas J. Jordan believes that the consequences of an inflated environment are higher than a nation with low inflation. SNB Jordan kept doors open for more interest rate hikes.

Technical Levels: Supports and Resistances

USDCHF currently trading at 0.8945 at the time of writing. Pair opened at 0.8974 and is trading with a change of -0.32 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.9021, 50 SMA 0.898, 100 SMA @ 0.9098 and 200 SMA @ 0.9323.

The previous day high was 0.9013 while the previous day low was 0.8944. The daily 38.2% Fib levels comes at 0.8987, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8971, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8941, 0.8908, 0.8872
• Pivot resistance is noted at 0.901, 0.9046, 0.9078

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