On Monday, The US dollar is surrendering most of the ground gained last week. The USD/CHF pair has declined by more than 1% from Friday’s highs at 1.0065, to reach session lows below 1.0000 at the time of writing.
In the long run, however, the current risk rally is likely to be short-lived. The market is widely expecting the US Fed to hike rates by 75 basis points again in November, while global economic prospects remain fragile on the back of geopolitical tensions, higher energy prices, and increasing COVID cases in China. This scenario is highly likely to strengthen the US dollar in the longer term.
A key support area at 0.9876: “USD/CHF’s surge was capped at the major resistance at the trendline from 2016 at 1.0075. This strong reversal lower paired with daily RSI holding a bearish divergence continues to strengthen the case for a near-term weakness.
Tags USD/CHF
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