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USD/CHF languishes near lows, set to test 0.9900

FXStreet (Mumbai) - The USD/CHF halted its previous slide and now consolidates ahead of 0.99 handle, with the CHF bears retaining control as we head towards the European open.

USD/CHF upside capped by 50-DMA

Currently, the USD/CHF pair trades modestly flat at 0.9919, within a striking distance of daily highs reached at 0.9916 last hours. The major languishes near lows in recent dealings as the Swiss franc remains bid as markets are predicting a flat-to-steady start on the European markets after witnessing extended sell-off in the Asian equities.

Moreover, the mixed trading witnessed in US dollar against its major competitors also adds to further downward pressure on the USD/CHF pair. The USD index loses -0.22% and trades at a three-day low of 98.16. Meanwhile, markets now await the SNB policy announcement due tomorrow for further CHF moves.

Analysts at Credit Suisse noted, “"Our view is that the SNB will still cut this Thursday, most likely by 25bp to -1.00bp. Although Draghi did not deliver to market expectations, our Swiss Economic Research team still believes that it will be important for the SNB's credibility to respond to the ECB cut, especially when domestic data are so weak."

USD/CHF Technical Levels

To the upside, the next resistance is located 0.9957 (50-DMA) levels and above which it could extend gains to 0.9991 (daily R1). To the downside, immediate support might be located at 0.9909 (Dec 4 low) and below that 0.9881 (Nov 4 low).

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