The US Dollar (USD) is recovering some lost ground against the Swiss Franc (CHF) on Friday. This slight bounce back seems to come amidst a risk-off atmosphere influenced by rising oil prices, which has countered the downward pressure created by decreasing US Treasury yields. Currently, the USD/CHF is rising from around the 0.8200 support level and testing the highs of Thursday at 0.8247. Momentum indicators suggest that bearish momentum is waning.
Brent Oil has surged to new five-month highs, surpassing $110.00, mainly due to Iran tightening its control over the Strait of Hormuz and recent strikes on Saudi oil facilities sparking renewed supply worries. Such elevated crude prices pose challenges for oil-importing nations like Switzerland.
Furthermore, the yield of the French 10-year OAT bond dropped by 10 basis points from its recent multi-decade peak of 5.14%, which may have lessened the CHF’s appeal as a safe haven amid the ongoing debt troubles in France.
Technical Analysis: US Dollar attracts buyers at 0.8200 support level
USD/CHF is currently trading around 0.8242, maintaining a slight bullish outlook in the near term as the recovery from the 0.8200 region extends past a prior support level of 0.8230. Momentum indicators are indicating that bearish momentum is decreasing, with the 4-hour Relative Strength Index returning to a neutral 50 position and the Moving Average Convergence Divergence (MACD) becoming positive.
If the bulls can manage to hold positions above 0.8230, attention may shift toward the weekly highs near 0.8275. A significant break above this level would end the current downtrend and target the October 13 and 14 lows near 0.8315.
On the flip side, if the price falls below 0.8230, it might encourage bearish traders to revisit support around the 0.8185 level, which marks the low from September 22. Should that happen, the next target would likely be around the mid-August and early September highs, in the vicinity of 0.8150.
