- Swiss franc jumps amid risk aversion and despite Jordan’s words.
- USD/CHF bearish correction gains speed.
- Next support is below 0.9880 at 0.9830 and 0.9800.
The USD/CHF fell sharply during the American session from 0.9970 to 0.9860, reaching the lowest level since May 6. It remains close to the lows, pressured by risk aversion. The Swiss franc and the Japanese yen are the best performers.
CHF soars, Wall Street plummets
The Swiss franc started to rise after comments from Thomas Jordan, president of the Swiss National Bank. He reiterated that the SNB is prepared to intervene in the foreign exchange market and act if inflation strengthens. Despite reaffirming the negative interest rate policy, the Swiss franc started to rise. It then accelerated as US stocks turned sharply lower.
The Dow Jones falls 2.65% and the Nasdaq 3.72%. The demand for security is boosting the yen, the franc, the dollar and bonds. Oil has reversed and is down 1.70%. Cryptocurrencies are under pressure again, with BTC/USD below $29,000.
Despite more talk of rate hikes from European Central Bank officials, the EUR/CHF is having its worst day in months. During the last hours it has fallen from 1.0490 to 1.0338, the lowest intraday level since May 6th.
The USD/CHF short-term technical outlook has changed dramatically over the last couple of days. After a rally from 0.9330 to 1.0054 (16 May high), the pair lost momentum and started a correction on Tuesday that is still going strong. A consolidation below 0.9880 should keep the negative momentum going. Next support is seen at 0.9830 and then 0.9800/10 awaits the 20 day SMA.
Technical levels
Source: Fx Street
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