On Wednesday, the Swiss Franc saw a significant increase in demand from investors after the Federal Reserve (Fed) gave a neutral guidance after they raised interest rates by 25 bps to 5.00-5.25%. The Swiss Franc asset has hit a two-year low of 0.8820 and is expected to decline further as the US Dollar Index (DXY) does not show convincing evidence of support. The USD index, or the US dollar index, looks vulnerable above its crucial support level of 101.07 amid concerns about the worsening US debt problems. The US administration in the White House is not ready to start negotiations on the cost of the President's proposed spending initiative. The US Treasury Department has announced that it will run out of funds in early June, which will likely result in the loss of 8.3 million jobs and a 6.1% reduction in economic output, as reported by the White House Council of Economic Advisers. Meanwhile, the S&P500 futures have managed to recover from previous losses and return to the positive zone, indicating a recovery in investors' risk appetite. Based on data we obtained from Fxstreet, USD/CHF fell near an important support level drawn horizontally from the low on January 8, 2021 at 0.8758. The supply area for US Dollar buyers is in the range of 0.8984-0.9000 on a weekly scale. The 10-period Exponential Moving Average (EMA) at 0.9041 has consistently been a barrier to the US Dollar's rise. The RSI (14) indicator is in the bearish range of 20.00-40.00, indicating that the downward momentum is very strong. If USD/CHF breaks through the intraday low of 0.8820, then this asset has the potential to head to the low of January 1, 2021 at 0.8794, and then to the low of January 2021 at 0.8758. However, in an alternative scenario, if USD/CHF manages to break through the psychological resistance at 0.9000, then the US dollar rally could push the asset towards the high of April 7, 2021 at 0.9082, after passing the low of that date at 0.9034.

 

 Also Read : Risky Assets Avoided, Safe Haven Swiss Franc Sought

 

Warning!

This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.

 

Get the latest news and articles from GIC Indonesia, you can check on Google News every day to find out the latest updates about the world of forex to crypto. Trading is also on GICTrade using an ECN account to enjoy trading with low spreads starting from zero!

Register Here To Get Maximum Trading Profit, Make It A Profit Opportunity!