USD/CHF slumps to 0.98 area as risk aversion dominates
- Risk-off mood pushes investors to safe-havens on Monday.
- US Dollar Index struggles to turn positive on the day.
After staying in a tight range below the 0.9850 mark for the majority of the day, the USD/CHF pair came under a renewed pressure in the last couple of hours and touched a fresh daily low of 0.9806. As of writing, the pair was down 0.28% on the day at 0.9812.
Disappointing trade data from China and industrial production data from the euro area caused investors to flee to safer assets such as the CHF today. Reflecting the risk-off mood, major European indices suffered heavy losses and Wall Street opened the day deep in the negative territory to boost the demand for safe-havens. Although the bearish momentum on US stocks seems to have eased following the opening bell, both the Dow Jones Industrial Average and the S&P 500 are still down around 0.5% on the day.
Meanwhile, the US Dollar Index, which tracks the USD's value against a basket of six major currencies, continues to move up and down in a narrow range on Monday, suggesting that the USD is also trying to benefit from the souring market sentiment and limiting the pair's losses for now.
Technical levels to consider
The initial support for the pair aligns at 0.9800 (daily low/psychological level) ahead of 0.9735 (Jan. 9 low) and 0.9715 (Jan. 10 low). On the upside, resistances are located 0.9845 (daily high/20-DMA), 0.9870 (Jan. 6 high) and 0.9900 (psychological level/50-DMA).