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USD/CHF prints three-day losing streak, renews intraday low of late.
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Swiss ZEW Survey – Expectations improved in December to -42.8.
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The market’s lack of confidence in the US dollar’s recovery is largely borne out by the bearish sentiment.
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Yields refreshed multi-day highs in China, before Russia concerns eased in a dull trading session.
USD/CHF takes offers to refresh intraday low around 0.9267 as it cheers the US Dollar pullback amid inactive markets during the holiday season. In doing so, the Swiss currency (CHF) pair fails to justify the previous day’s Doji candlestick amid firmer Swiss ZEW Survey numbers for December.
The latest Swiss ZEW survey – As expected, the sentiment gauge improved to -42.8 in December compared to -50.5 forecast and -57.5 previous reading. On the other hand, US pending home sales for November fell to -37.8% YoY vs. -36.7% expected and -37.0% prior while the Richmond Fed Manufacturing Index rose to 1.0 vs. -4.0 expected for December and -9.0 previously.
Also weighing on the quote may be the latest retreat in US Treasury yields, which in turn weighs on the US dollar. That said, the U.S. 10-year Treasury yield was down 2.8 basis points to 3.858% by press time after rising the previous day to its most since Oct. 19.
While market consolidation and a lack of key data can be attributed to recent weakness in the USD/CHF pair, the Swiss franc’s (CHF) safe-haven appeal and recent firmer data seem to favor the bears amid declining hawkish bias on the Fed.
That said, the Reuters report suggested inconsistent virus details from Beijing and multiple economies announcing new testing requirements from China had previously weighed on market sentiment and driven up US Treasury yields. “China reported three new Covid-related deaths for Tuesday, up from one for Monday – numbers inconsistent with what funeral parlors are reporting, as well as with the experience of much less populated countries after they reopen,” Reuters reported.
Additionally challenging the risk takers is Russia’s rejection of peace with Ukraine unless it accepts the treaty allowing additional territories, as well as an escalated war in the city of Kherson.
Against this backdrop, stocks in the Asia-Pacific region trade mixed while the S&P 500 Futures print mild gains, despite the downbeat closing of the Wall Street benchmarks.
Moving on, the USD/CHF pair may witness the continuation of the latest moves amid a likely absence of major data/events. Even so, the US Initial Jobless Claims, Treasury yields and headlines surrounding Russia, as well as China, should be eyed for intraday directions.
Technical analysis
Wednesday’s Doji candlestick and a two-week-old ascending support line, close to 0.9235 by the press time, challenge USD/CHF bears. Recovery moves, however, remain elusive unless crossing the 21-DMA hurdle surrounding 0.9330.
ADDITIONAL IMPORTANT LEVELS
