USD/CHF under pressure amid risk-aversion
At the beginning of the NA session, the USD/CHF pair extended its slide to a fresh seven-week low at 0.9880. As of writing, the pair is losing 0.48% at 0.9890.
Major US equity indices had another weak start to the day as investors are worried about the Trump administration's ability to deliver on the campaign promises such as the tax-reform and large infrastructure spending. On Thursday, trust in Trump is going to be tested as the voting on the legislation to dismantle Obamacare will go underway. President Trump in a recent speech said that legislative effort begins with Thursday's crucial vote and it really is a crucial vote for the Republican Party and the people of the country.
- US stocks extend bearish slide on uncertainty over Trump-reflation policies
On the other hand, SNB's quarterly bulletin hasn't offered anything new as it once again reiterated that the SNB would remain active in the foreign exchange market as necessary while taking the overall currency situation into consideration. Additionally, the bank also announced a new calculation method for the exchange rate indices and pointed out in the official press release that the new index, too, shows that the Swiss franc is significantly overvalued.
- New calculation of SNB exchange rate indices - Press release
- The SNB will remain active in the foreign exchange market as necessary - SNB quarterly bulletin
Technical outlook
0.9860 is a critical support for the pair as it marks the end of the Jan/Feb downtrend. Below this level, next supports could be found at 0.9820 (Nov. 10 low) and 0.9735 (Nov. 8 low). On the upside, resistances are located at 0.9940 (200-DMA), 1.0000 (psychological level) and finally 1.0050 (20-DMA).
