Swissie offensive continues as US dollar surges

The Swiss franc is the top performer against the greenback for the second consecutive day, advancing nearly 1% an hour into US trade. 2Q GDP out of Switzerland overnight printed at expectations with PMI manufacturing data slightly besting estimates with a print of 51.7 vs. expectations for a read of 51.0. As concerns about a possible SNB intervention ease, the swissie should remain well supported at these levels as the euro comes under pressure on fears of further debt contagion in the region. The USDCHF pair rebounded off of interim resistance at 0.8075 before moving lower, with price action continuing to straddle the 76.4% Fibonacci retracement taken from the July 19th decline at the 0.80-handle. Downside targets are held at 0.7950, the 0.79-figure, and 0.7850. Ultimately, the pair will target the 61.8% retracement at 0.7820. Topside resistance remains at 0.8075 with subsequent ceilings eyed at 0.8130, the 0.82-handle, and 0.8230. Investors are eagerly anticipating tomorrows non-farm payroll data out of the US with a weaker than expected print likely to see haven flows continue to support swissie.

Key Levels/Indicators

Level/Indicator

Level

50-Day SMA

0.8036

20-Day SMA

0.7836

10-Day SMA

0.8003

2011 CHF High

0.7124

The euro plummeted early in North American trade, sliding more than 0.9% against a stronger greenback. The single currency is likely to remain under pressure as concerns about the European banking sector continue to gather pace. The EURUSD pair broke below the 38.2% Fibonacci extension taken from the July 12th and August 4th troughs at 1.4320 in overnight trade. A stronger than expected print on the US August ISM manufacturing report saw the pair break even lower at 1.4265 with interim targets eyed at the 23.6% extension at 1.4220. Subsequent floors are seen at the 1.42-figure and 1.4160. Topside resistance holds at 1.4320 backed by 1.4350 and the 1.44-handle. Overnight trader will be eyeing data out of the Euro zone with the July producer price index on tap.

Key Levels/Indicators

Level/Indicator

Level

50-Day SMA

1.4317

20-Day SMA

1.4356

10-Day SMA

1.4403

2011 EUR High

1.4938

Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.

Twitter: @MBForex
WEB:
www.fxcm.com

About the Author
Michael Boutros Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
Comments
comments powered by Disqus