USD / CHF flirts with the 200 DMA around 0.9075-70, six week lows

• Widespread post-FOMC USD weakness dragged USD / CHF lower for the fourth day in a row.
• The dismal macroeconomic data from the US did not provide any respite for the USD or provide any support for the pair.
• The bulls ignored a generally positive risk tone, which tends to undermine the safe-haven CHF.

The pair USD/CHF It fell to six-week lows around the 0.9075-70 region in reaction to lousy US macro data, with bears now expecting a sustained break below the very important 200-day SMA.

The pair extended this week’s rejection drop from the 0.9200 level and remained under some selling pressure for the fourth consecutive session on Thursday. The ongoing downward trajectory was supported solely by the strongly offered tone around the US dollar, which, so far, has not benefited from a good rally in US Treasury yields.

Fed Chairman Jerome Powell took a moderate turn in the post-meeting press conference, emphasizing that they were far from making substantial progress on employment. Powell was also cautious about the drawdown, saying that some details were discussed by policymakers, but that a few more meetings will be needed to address it, which continued to act as a headwind for the dollar.

The USD sell bias accelerated early in the US session after the disappointing release of the Q2 Advanced US GDP report. The first estimate showed that the world’s largest economy expanded at an annualized rate of 6.5% during the April-June period, modestly higher than the 6.4% in the previous quarter, although it fell short of expectations by a large margin.

Added to this, initial weekly US jobless claims fell less than anticipated to 400,000 during the week ending July 23 compared to the prior week’s revised upward reading of 424,000. The data reaffirmed speculations that the Fed will maintain its ultra-losing policy stance for a longer period and did nothing to provide respite for USD bulls.

Even a generally positive tone in equity markets, which tends to undermine the safe-haven Swiss franc, also failed to support the USD / CHF pair. Bearish traders now await a follow-up sell below the 200-day SMA support before positioning for any further short-term depreciation moves, possibly back towards the 0.9000 round figure.

Technical levels