USD/CHF: Swiss franc eases-off 5-day tops, back to test 0.9700?

The CHF bulls took a breather from the risk-off driven rally, allowing a recovery in USD/CHF back towards 0.97 handle.

Swiss franc – the biggest gainer

The spot extended its overnight sell-off into Asia and lost nearly 100-pips further, as risk-off intensified and spooked markets, after North Korea responded to Trump’s comments by warning that it plans to strike a missile on Guam. Trump noted that North Korea "will be met with fire, fury and frankly, power, the likes of which this world has never seen before."

Amongst the safe-haven, the Swiss franc was the top performer so far this Wednesday, as markets took the excuse of increased flight to safety amid escalating US-North Korea tensions, to unwind their positions after the recent CHF weakening seen over the last fortnight.

Over the last hour, the major is seen making attempts to regain 0.9700 levels, as risk-off sentiment appears to have cooled-off a bit heading into the European open, while ongoing US dollar strength, in the wake of solid US JOLTS jobs data also aided the USD/CHF recovery.

Looking ahead, risk trends will dominate the USD/CHF price-action, while the second-liner US macro releases could offers some impetus to the buck.

USD/CHF Technical levels                

Jim Langlands at FX Charts notes, “0.9770/75 will continue to provide decent resistance ahead of 0.9790 and then 0.9805/10. Above there would open up the next Fibo level at 0.9848, above which could then head to the 100 WMA at 0.9870. On the downside, minor support lies at 0.9700/10 and at 0.9685 ahead of the 4 Aug low at 0.9670. Further out, last week’s lows at 0.9630 comes into view ahead of the 100 MMA (0.9600), which should be decent support if we see it.”