Swiss Franc: Further gains possible against US Dollar - UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann report that USD/CHF slid to 0.8124 before rebounding to 0.8168, with intraday price action expected to consolidate between 0.8125 and 0.8185. On a one-to-three-week horizon, they still see scope for a test of 0.8110 provided 0.8205 strong resistance holds, even though the latest rebound has slowed immediate downside momentum.

Consolidation but risk still lower

"24-HOUR VIEW: USD dropped sharply to a low of 0.8148 two days ago. Yesterday, we indicated that USD “could break below 0.8140.” However, we pointed out that “it is unclear whether it can maintain a foothold below this level.” We also highlighted that “it is also premature to expect 0.8110 to come into view.” We were not wrong, as USD fell to a low of 0.8124 before rebounding to close at 0.8168 (-0.46%). Downward momentum has slowed with the rebound, and USD is unlikely to weaken further. Today, we expect USD to consolidate, most likely between 0.8125 and 0.8185."

"1-3 WEEKS VIEW: Tracking our negative USD view from late last week, we highlighted yesterday that USD “must break and hold below 0.8140 before further declines can be expected.” We added, “the next level to watch below 0.8140 is 0.8110.” USD subsequently broke below 0.8140 but it rebounded to close at 0.8168 (-0.46%). Although USD did not close below 0.8140, given the sharp decline to 0.8124, there is a chance for USD to test 0.8110 before the risk of a recovery increases. On the upside, a breach of 0.8205 (‘strong resistance’ was at 0.8220 yesterday) would mean that 0.8110 is not coming into view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)