The pair extends weakness on Wednesday and dips to the lowest since January 2015, when the Swiss National Bank freed the franc to rise, as news that Democrats move closer to Senate control, added pressure on the US dollar.
Strong franc’s rise is mainly driven by dollar selling and should not worry the Swiss central bank which spent a lot less on interventions in Q3 compared to the first half of 2020.
Bears pressure targets at 0.8705/0.8697 (Fibo 50% of 2011/2016 – 0.7067/1.0343 rally/2014 low), break of which would spark fresh bearish acceleration towards 0.8318 (Fibo 61.8%). Fundamentals are expected to remain dollar-negative, with bearish technical studies on all larger timeframes, maintaining pressure. December’s break and close below massive monthly Ichimoku cloud added to strong negative signals.
Cloud base (0.8882) reverted to strong resistance which is expected to cap extended upticks and provide better opportunities to re-join bearish market.
Res: 0.8798, 0.8839, 0.8858, 0.8882
Sup: 0.8760, 0.8697, 0.8665, 0.8566