During the Friday’s European trading hours, the USD/CHF currency pair stopped its early-day bearish rally and drew some fresh bids around above 0.9100 level despite the cautious mood around the equity markets. Besides this, the prevalent selling bias surrounding the U.S. dollar also failed to drag the currency pair down. Hence, the broad-based U.S. dollar came under pressure instantly after the Thursday’s rather unimpressive U.S. economic data.
Apart from this, the U.S. dollar losses were further bolstered by the fresh fall in U.S. tech stocks on Thursday, which tends to drag the currency pair down. Across the pond, the risk barometer tracks Wall Street’s mild losses to print a three-day losing streak, which in turn, underpinned the safe-haven Swiss Franc and becomes the key factor that kept the lid on any further gains in the currency pair.
Currently, the USD/CHF currency pair is currently trading at 0.9099 and consolidating in the range between 0.9075 – 0.9100. The faith over the coronavirus (COVID-19) vaccine/treatment was dominated by concerns about the second wave of coronavirus infections, which fading optimism over a sharp V-shaped global economic recovery. Besides this, the U.S. Federal Reserve’s (Fed) another stress test for large banks and a lack of major data/events also keeps the market trading sentiment under pressure. Whereas, the U.K. scientist group’s readiness for a state lockdown of almost two weeks and Global Times’ direct war signals to the U.S., over American diplomat’s visit to Taiwan, also exerted downside pressure on the equity market, which tend to underpin the safe-haven Swiss Franc.
Despite the risk-off market sentiment, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day as doubts persist over the global economic recovery from COVID-19. The disappointing U.S. employment data witnessed that. Apart from this, another rout in U.S. tech stocks also undermined the U.S. dollar. However, the losses in the U.S. dollar becomes the key factor that kept the lid on any further gains in the currency pair. Whereas, the U.S. Dollar Index, which tracks the greenback against a bucket of other currencies, dropped by 0.05% to 92.927 by 12:48 AM ET (5:48 AM GMT).
Looking forward, the market traders will keep their eyes on the USD moves amid the lack of major data/events on the day. However, the U.S. Michigan Consumer Sentiment Index for September, which is expected 75 versus 74.1 prior, will likely help resolve near-term USD moves. Furthermore, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for the fresh direction.
The USD/CHF is trading at 0.9104, holding right below a strong resistance level of 0.91130. Closing of candles over the support level of 0.9077 level can trigger buying trades in the USD/CHF pair. The series of EMAs is also supporting buying trends; therefore, we may look for bullish trades on the USD/CHF pair. Check out the forex trading signal below…
Entry Price – Buy 0.90932
Stop Loss – 0.90532
Take Profit – 0.91332
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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