Swiss Franc: Extends gains against US Dollar following sharp sell-off – UOB

A sharp fall in USD/CHF has erased earlier upward momentum and overturned the previous range-trading assessment from United Overseas Bank strategists Quek Ser Leang and Lee Sue. They now expect the pair to drift lower within a limited range, with room for further losses before it stabilises. Their medium-term outlook continues to envisage only a modest recovery, with insufficient strength to retest earlier highs.

Dollar-Swiss Faces Further Gradual Declines

"24-HOUR VIEW: USD rose to 0.8313 two days ago and then pulled back. Yesterday, when it was at 0.8285 in the early Asian session yesterday, we noted that “momentum indicators are turning flat,” and we held the view that USD “has likely entered a range-trading phase between 0.8265 and 0.8305.” Our view of range-trading was incorrect, as USD declined sharply to 0.8236. The sharp decline has scope to extend to 0.8220 before stabilisation can be expected. On the upside, resistance is at 0.8270, with minor resistance at 0.8255."

"1-3 WEEKS VIEW: On Wednesday (28 Oct, spot at 0.8290), we highlighted that “the price action suggests USD could test 0.8320.” We also highlighted that “the odds of a continued rise above this level are not high for now.” USD subsequently rose to 0.8313 but in a sharp move yesterday, it plunged and broke below our ‘strong support’ level at 0.8250. Upward momentum has faded. The slight increase in downward momentum suggests USD could edge lower from here. However, any decline should stay within a 0.8190/0.8290 range."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)