#USDCHF @ 0.99561 The dollar extends losses on Monday and returns below parity. (Pivot Orderbook analysis)

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• The dollar extends losses on Monday and returns below parity.
• The brighter market sentiment is weighing on the safe-haven USD.
• USD/CHF: Below 0.9876 downside pressure will increase – Credit Suisse.

The pair currently trades last at 0.99561.

The previous day high was 1.0066 while the previous day low was 0.9965. The daily 38.2% Fib levels comes at 1.0028, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0004, expected to provide resistance.

The US dollar is giving away on Monday most of the ground gained last week. The pair has depreciated more than 1% from Friday’s highs at 1.0065, to reach session lows below 1.0000 at the time of writing.

News reports confirming that the UK Finance Minister, Jeremy Hunt, will reverse most of the mini-Budget tax cuts plan announced in September have boosted investors’ optimism on Monday.

Most of the world’s major stock indexes posted significant advances on Monday. In the US, the Dow Jones advances 1.81%, with the S&P Index 2,74% up and the Nasdaq rallying 3,5%, which has weighed on US Treasury bond yields, pulling the safe-haven USD lower across the board.

In the long run, however, the current risk rally is likely to be short-lived. The market is widely expecting the US Federal Reserve to hike rates by r 75 basis points again in November, while global economic prospects remain fragile on the back of geopolitical tensions, higher energy prices, and increasing COVID cases in China. This scenario is highly likely to strengthen the US dollar in the longer term.

On the downside, FX analysts at Credit Suisse point out to a key support area at 0.9876: “USD/CHF’s surge was capped at the major resistance at the trendline from 2016 at 1.0075. This strong reversal lower paired with daily RSI holding a bearish divergence continues to strengthen the case for a near-term weakness (…) “Immediate support is seen at the recent low and the 13-day exponential average at 0.9929/13, though only a close below 0.9876 would raise more serious thoughts of the near-term risk shifting lower again.”

Technical Levels: Supports and Resistances

USDCHF currently trading at 0.9956 at the time of writing. Pair opened at 1.0052 and is trading with a change of -0.96 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.9859, 50 SMA 0.972, 100 SMA @ 0.97 and 200 SMA @ 0.9551.

The previous day high was 1.0066 while the previous day low was 0.9965. The daily 38.2% Fib levels comes at 1.0028, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.0004, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.9989, 0.9926, 0.9888
• Pivot resistance is noted at 1.009, 1.0129, 1.0192

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