USD/CHF has been a prominent mover this week, dropping below the 0.9000 level after consolidating just above it for the past two months. This shift coincides with a pattern that typically occurs in June trading. In the third trading day of the month, the pair faces a crucial technical test.
The recent decline has brought USD/CHF to a test of its 200-day moving average, currently at 0.8893. This level is near the 61.8 Fib retracement level of the year’s upward swing, at 0.8883. This area now serves as a key support level for USD/CHF moving forward.
If the pair manages to hold above this level, buyers will still have a chance to stay in the game. However, a break below could lead to a more prolonged decline. In the event of a downward break, the next key support level to watch is the 50.0 Fib retracement at 0.8778, along with the late April low and March lows around 0.8729-45.
This week, the performance of the US dollar will be a crucial factor to monitor. The upcoming US labor market data will drive trading sentiment in the days ahead. Additionally, the Swiss franc may benefit from an overall nervous market mood, especially with European stocks showing signs of instability.