USD/CHF recovery loses momentum ahead of parity
After starting the day with a bearish gap, the USD/CHF pair was able to fill that gap during the early trading hours of the European session. However, the pair seems to have lost some bullish momentum around 0.9980 and has been moving in a horizontal channel since. As of writing, the pair was down 0.1% on the day, at 0.9958.
European currencies were able to find demand after Emmanuel Macron came on top in the first round of French presidential elections. The US Dollar Index came in under pressure and dropped below 99 level. The index has been spending the last few hours between 99 and 98.80.
- French election results provided collective sigh of relief across markets - Rabobank
Despite a weak greenback, the USD/CHF pair found it difficult to sustain the bearish momentum as the European stock indexes recorded substantial gains, reflecting an improved risk sentiment. As a safe haven, the positive impact of the French election on the CHF couldn't sustain.
The latest data from the United States revealed that the Chicago Fed National Activity Index fell to 0.08 in March from 0.27 (revised from 0.34) in February. The data, however, was largely ignored by the participants. The risk sentiment could continue to help the pair start another recovery movement if the US stock markets rally as well. In the meantime, the USD is not showing any signs of a recovery, which could limit the bullish waves.
Technical outlook
The pair could face the immediate resistance at 0.9980 (200-DMA) ahead of 1.0000 (psychological level) and 1.0040 (100-DMA). To the downside, supports could be seen at 0.9905/00 (daily low/psychological level), 0.9875 (Mar. 26 low) and 0.9810 (Mar. 27 low).
- USD/CHF could attempt some consolidation – Commerzbank