USD/CHF drops to fresh multi-month lows below 0.96 as DXY erases recovery gains
- USD/CHF advances to 0.9665, gives back earnings in the NA session.
- DXY fails to stay above the mid-90s, retraces majority of daily gains.
The USD/CHF pair reversed course in the NA session and gave back all of its gains to turn negative on the day, dropping to its lowest level since late September at 0.9595. As of writing, the pair was trading at 0.9600, down 0.3% on the day.
The recent retreat of the pair seems to be caused by the greenback losing strength in the NA session. After making a technical recovery and advancing to a daily high at 90.58, the US Dollar Index retraced the majority of its daily rise and was last seen at 90.20, where it was up only 0.7%.
Moreover, after starting the day on a positive note and scaling new record highs, major equity indexes in the U.S. struggled to preserve their momentum, allowing safe-havens to gather strength against their peers. At the moment, the S&P 500 was down 0.2% while the Nasdaq Composite was losing 0.27%.
Meanwhile, following his speech at Zurich University, Swiss National Bank Chairman Thomas Jordan reiterated that the CHF was still highly valued while responding to questions from the audience. However, that comment didn't receive any reactions from the market.
Technical outlook
The pair could face the first technical support at 0.9500 (psychological level) ahead of 0.9420 (Sep. 8 low). With a break below the latter, the pair will refresh its lowest level since August 2015 and extend its losses toward 0.9315 (Aug. 25, 2015, low). On the upside, resistances align at 0.9665 (daily high), 0.9740 (200-DMA) and 0.9830 (100-DMA).