- USD / CHF retreats from multi-month highs amid a modest USD pullback from three-week highs.
- The Fed’s optimistic expectations should act as a tailwind for the USD and help limit the pair’s losses.
- Risk appetite could weigh on the safe-haven CHF and continue to support the pair.
The pair USD/CHF has moved lower during the European session on Friday, falling to a daily low around the 0.9260 level, although it has lacked continuation. At time of writing, the pair is recovering slightly towards 0.9270.
The pair has witnessed a modest pullback from the highest level since April 9, around the 0.9280 region touched early this Friday, and has returned a portion of the previous day’s strong earnings. After the move to three-week highs, the US dollar bulls have chosen to withdraw some gains. This has been seen as a key factor that has acted as a headwind for the USD / CHF pair.
That said, a combination of factors could continue to provide support and help limit any deeper losses for the USD / CHF pair. The Upbeat US Retail Sales Report Thursday it now appears to have convinced investors that the Fed would eventually begin reversing its massive pandemic-era stimulus sooner rather than later. This, in turn, should limit any significant corrective decline in the USD.
Apart of this, prevailing risk appetite could weigh on demand for safe haven Swiss franc and offer some support to the USD / CHF pair. Furthermore, a sustained break out of the 0.9225-30 resistance zone on Thursday favors the bulls and supports the prospects for further gains. Therefore, any subsequent decline could still be seen as a buying opportunity and remain limited.
Market participants are now awaiting the publication of the preliminary index of consumer sentiment from the University of Michigan in the United States, which will be released at the beginning of the American session today. The data could influence the USD and provide some boost to the USD / CHF pair. Investors could continue to take cues from the broader market risk sentiment and seize some opportunities around the pair.
Technical levels to observe
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
