USD/CHF tumbles to 0.9635 as Dollar slides

A sharp decline of the US Dollar against European currencies sent USD/CHF down from 0.9685 to 0.9635. The pair then bounced and trimmed losses. At the moment, is trading at 0.9660, down 20 pips from Friday’s closing price. 

US tumbles, weakens USD/CHF 

The abrupt decline of the greenback pushed the pair to test Friday’s lows around 0.9620/30. So far, it has been able to hold on top but the short-term momentum changed significantly. 

End of month fixing amid a low volume environment, likely favor the recent spike in volatility among European currencies and the US dollar. The Dollar Index printed a fresh 1-year low at 92.83. 

Outlook 

The Swiss franc was last week the worst performer among the most traded currencies. USD/CHF rose despite dollar weakness. The rally sent the price above 0.9700 but it had difficulties holding on top. 

Today is pulling back, making so far a modest retreat after last week rally. If the pair drops below 0.9645 (55-day MA) the correction could gain momentum, extending the move to the 20-day moving average that stands at 0.9585. 

On the other direction, if the greenback rises and consolidates on top of 0.9700, then a test of June highs at 0.9770 could be seen. That area is the key resistance before the 0.9810/20 zone.