USD/CHF at new weekly highs as Credit Suisse shakes markets and boosts USD

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  • USD/CHF gains strong positive traction on Wednesday amid a large intraday USD rally.
  • Negative news around Credit Suisse boosts USD.
  • Bets on a Fed rate hike of at least 25 basis points in March support the prospect of further hikes.

The pair USD/CHF receives aggressive offers in the middle of the European session and recovers to a new weekly high, above the 0.9250 zone in the last hour.

The latest leg of a flash rally is led by negative news surrounding Swiss lender Credit Suisse. In fact, the Swiss bank’s top shareholder has ruled out further investing in the troubled Swiss bank, as further participation would pose additional regulatory hurdles. On the other hand, the Swiss National Bank (SNB) does not comment on the situation of Credit Suisse and fuels speculation that the bank will go into receivership. This triggers a sell-off in global equity markets, which boosts the US dollar’s status as a global reversal currency and turns out to be a key factor behind the USD/CHF pair’s strong intraday rally.

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The dollar is receiving additional support from the revival of bets on a rate hike of at least 25 basis points by the Federal Reserve at its next monetary policy meeting on March 21-22. Market expectations were bolstered by the latest US CPI report, released on Tuesday, which indicated that inflation is not falling as fast as expected. This, in turn, favors dollar bulls and supports the prospects for a further appreciation move in the near term for the USD/CHF pair, which has already recovered almost 200 points from its lowest level since the beginning of February, in around the 0.9070 zone that it touched on Monday.

Market participants now turn to the US economic calendar – with the release of the Producer Price Index (PPI), the monthly Retail Sales figures and the Empire State Manufacturing Index. The data could influence the price dynamics of the dollar and give a new impetus to the USD/CHF pair. However, attention will remain focused on the looming banking crisis, which should continue to instill volatility in financial markets and allow traders to take advantage of short-term opportunities.

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From a technical point of view, although the pair seems to have reversed the recent decline, it has not risen enough to support that the dominant short-term downtrend has ended and there is a risk of a reversal of the pair. The current recovery from the lows of 0.9070 has hit a major snag at the 50-day SMA at 0.9255 and has since pulled back on technical selling. You will now need to close decisively above the SMA to confirm a breakout and continuation higher. On the other hand, a fall towards the lows of March 13 remains a risk to consider.

Technical levels to watch


Last price today 0.925
Today I change daily 0.0108
today’s daily variation 1.18
today’s daily opening 0.9142
daily SMA20 0.9311
daily SMA50 0.926
daily SMA100 0.9385
daily SMA200 0.9555
previous daily high 0.9165
previous daily low 0.9096
Previous Weekly High 0.9439
previous weekly low 0.9175
Previous Monthly High 0.9429
Previous monthly minimum 0.9059
Fibonacci daily 38.2 0.9139
Fibonacci 61.8% daily 0.9123
Daily Pivot Point S1 0.9104
Daily Pivot Point S2 0.9066
Daily Pivot Point S3 0.9035
Daily Pivot Point R1 0.9172
Daily Pivot Point R2 0.9203
Daily Pivot Point R3 0.9241

Source: Fx Street

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