- Attempts to recover the US dollar were limited to 0.9170.
- The dollar remains offered as Fed tightening expectations fade.
- USD / CHF: Expected to fall towards 0.9081– Commerzbank.
The USD has attempted to bounce from the six-week lows at 0.9120, following a three-week drop from levels above 0.9300. The pair USD/CHFHowever, it has lacked follow-up, with the 0.9170 resistance area keeping bullish attempts on hold.
The Swiss franc strengthens amid a climate of risk aversion
The dollar failed to make a significant recovery on Friday and is on track to close a three-week slide, with the CHF favored by the climate of risk aversion. Concerns about inflation and supply chain bottlenecks have returned to the limelight, and expectations about the Fed’s rate hikes have faded.
Federal Reserve Chairman Jerome Powell has provided some support to the USD in a virtual guise, confirming the bank’s commitment to begin reducing bond purchases. However, the dollar’s reaction has been limited, with nothing new coming out of the speech, as Powell downplayed the possibility of interest rate hikes in the coming months.
USD / CHF expected to depreciate further, targeting 0.9081 – Credit Suisse
From a technical perspective, Karen Jones, head of the FICC technical analysis research team at Commerzbank, sees the pair in a broader downtrend, heading below 0.9100: USD / CHF is vulnerable in the short term, is under pressure and we would allow further losses (…) This may be just an ABC correction, but intraday Elliott wave counts are still negative and we suspect the market will see a deeper liquidation to the 200-day MA of 0.9142 and potentially the 2020-2021 uptrend at 0.9081 ”.