USD/CHF eases to session lows of 0.9530, nears the year's low at 0.9516
The key level to watch for USD/CHF will be a daily close below the September 2018 low at 0.9542. So far this week, buyers have managed to prevent a daily close below that level and that is helping the technical picture a little bit for now.
But as we see risk aversion start coming back into the market today, this is pushing the franc higher and is seeing USD/CHF threaten a fall below that as well as the low posted earlier this week at 0.9516.
It could prove to be a slippery slope for USD/CHF once it gets past the key support level above as there is little in the way of stopping a move towards 0.9200 potentially.
With the Fed set to cut rates further and the virus situation still impacting the world economy, the franc will continue to see inflows as the market continues to deal with the economic fallout and the possibility that central bank action can do little to stop that.
It is a precarious spot for USD/CHF and the technical breakdown looks attractive even if you're not in the trade already.
Just be mindful of the potential for the SNB to step in from time to time. But as I have argued before, they are in no place to stop the franc from appreciating. The best they can do is to only smooth out that appreciation when global forces are working against them.
