Swiss franc resilient despite dollar advance

The swissie is the top performing currency against a stronger US dollar with an advance of just 0.07% on the session. The dollar has mounted a substantial counteroffensive after suffering three days of consecutive declines with the greenback outperforming all of its major counterparts, save the swissie and the euro. Markets are on the defensive today with global equity markets trading lower across the board, fueling flows into lower yielding assets as a bout of profit taking weighs on broader market sentiment.

The USD/CHF has continued to come off since breaking below channel support dating back to the Feb. 29th low with interim support seem holding at the 91-figure. A break here challenges the March 8 lows at 9070 with such a scenario eyeing subsequent floors at 9040 and 9010. Topside resistance holds at 9150 backed by the 38.2% Fibonacci extension taken from the Feb. 29 and March 8 troughs at 9170 and the 50% extension at the 92-handle. The downside here should be limited as appreciation in the franc weighs on the EUR/CHF exchange rate, which continues to respect the 1.20 floor imposed by the SNB.

Key Levels/Indicators

Level/Indicator

Level

200-Day SMA

0.8812

100-Day SMA

0.9209

50-Day SMA

0.9194

2011 CHF HIGH

0.7069

The New Zealand dollar is the weakest performer at noon in New York with a loss of more than 1.1% on the session. As one would expect, the risk-off environment has continued to weigh on higher yielding currencies with the kiwi and aussie suffering broad based losses as investors seek refuge in haven assets. The NZD/USD currently rests on support at the 61.8% Fibonacci retracement taken form the March 13 advance at 8145 with subsequent floors seen at the 78.6% retracement at 8108, 8080, and the 100% retracement at 8060. A break below this level risks substantial losses for the kiwi with such a scenario eyeing longer-term targets at the 100-day moving average just shy of the 80-figure. Topside resistance stands at the 50% retracement at 8173 backed by the 82-figure and the 23.6% retracement at 8230. Look for the kiwi to consolidate into the close with a continued risk sell-off tomorrow likely to keep pressure on the high yielders.

Key Levels/Indicators

Level/Indicator

Level

200-Day SMA

0.8093

100-Day SMA

0.7979

50-Day SMA

0.8225

2011 NZD HIGH

0.8842

 

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.
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