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CHF: USDCHF Testing Below 200-day MA amid Broad Greenback Weakness

CHF
  • With USDJPY extending losses to around 1.35%, USDCHF (-0.72%) has also been building downside momentum in recent trade. With desks noting that carry trade strategies may be losing their attractiveness due to the narrowing of rate differentials, it is understandable to see other funding currencies such as the CHF receive renewed optimism.
  • USDCHF has sold off roughly 65 pips since 0800BST and price action may have been exacerbated by a break of trendline support, drawn from the December lows. Concurrently, USDCHF is also testing below the 200-day moving, which intersects at 0.8880. Spot now trades at a 4-week low.
  • Below here for USDCHF, the June lows and strong pivot support is seen between 0.8820/27. 50-day EMA resistance moves down to 0.8980.
  • Additionally, EURCHF sits 0.35% lower on the session and is just above 0.97 at typing. Rabobank put out a note yesterday, citing risks of the cross falling to 0.96, amid the safe haven demand related to European budget issues, namely in France and Italy. They “see risk of dips in EUR/CHF towards 0.96 on a 1-to-3-month view.”

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