USD / CHF falls below 0.9250 amid risk aversion in financial markets

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  • The nervousness of the South African variant NU COVID-19 fueled risk aversion.
  • USD / CHF tumbled from 0.9355 to 0.9230 as market sentiment waned.
  • USD / CHF broke the 50 DMA, the bears watch the 100 and 0.9200 DMA.

The USD/CHF plummets during the American session, down 1.44%, trading at 0.9223 at the time of writing. In the evening session, the nervousness of COVID-19, around a new variant of the virus called NU, found in South Africa, took a toll on market sentiment as safe-haven currencies such as the Swiss franc and the Japanese yen are rising against most G8 currencies, including the US dollar.

The nervousness of the South African variant COVID-19 NU fueled risk aversion

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In the American session, USD / CHF traded near the highs of 0.9350, but the news of the new COVID-19 UN variant found in South Africa spurred the downward movement in the pair, breaking crucial levels on the way south. . The 50-day moving average (DMA) at 0.9234 was broken at press time, exposing the 100-day DMA around 0.9200.

Data from South Africa keep the global scientific community on alert. There is a possibility that the NU variant is more virulent than the Delta, and could be resistant to vaccines. According to the scientists, it has a large number of mutations in the spike protein and is the “most evolved” variant of the original virus so far discovered.

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That said, in the short term, USD / CHF traders would be relying on COVID-19 developments, along with the macroeconomic outlook and market sentiment, which could offer further impetus to act accordingly.

USD / CHF Price Forecast: Technical Outlook

USD / CHF is trading below DMA 50, approaching 0.9200, trading near two-week lows. However, the fundamentals have not changed as the move was triggered by market sentiment, so the pair is leaning higher. Furthermore, the Oct 26 swing high at 0.9226 resistance turned support, coupled with the 50 DMA, limited the downside move at this time, but a daily close above the aforementioned levels is needed to confirm a bottom. .

On the way south, the confluence of the 100 and 0.9200 DMA would be the first support zone. A break of the latter would expose crucial support levels, such as the 200 DMA at 0.9168, followed by 0.9100.

On the other hand, in the result of recovering 0.9230, that would expose the July 2 high at 0.9274, followed by 0.9300.

Technical levels

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