USDCHF Drop To Two Month-Lows on U.S. – China Tensions
USDCHF drops to two-month lows after weaker than expected employment data from the USA. U.S. weekly initial jobless claims fell to 1.877 million from 2.126 million but came above the consensus estimates of 1.833 million for the week ending May 30. The continuing claims rose to 21.49 million for the week of May 23 also above the expectations of a second drop to 20 million. United States Nonfarm Productivity came in at -0.9%, topping the expectations of -2.7% in the first quarter of 2020.
U.S. dollar is under pressure against CHF amid the escalation in USA-China trade relations after the U.S. suspended Chinese airlines passenger flights to and from the U.S. with effect from June 16.
USDCHF is 0.49% lower at 0.9564 as the bearish momentum is intact for the pair. A rectangle pattern formation spotted in the daily chart. The rectangle is a continuation pattern that forms during a pause in the trend, here a downtrend. Today the pair sets a breakout to the downside, and that signals a continuation of the downtrend. The target to the downside, if the break confirmed points to 0.9450. So today the technical picture is clearly bearish and lower might be on the cards.
On the downside, initial support for USDCHF will be met at 0.9558 the daily low. If the USDCHF pair breaks below the next target for sellers is at 0.9501 the low from March 30. More bids might emerge at 0.9454 the low from March 17th trading session.
On the other hand, immediate resistance for the pair stands 0.9624 the daily top. Next supply zone waits at 0.9647 the high from yesterday’s trading session. A critical resistance level stands at 0.9683 the 50-day moving average.