USD/CHF breaks range and falls to test weekly lows

USD/CHF broke to the downside and fell 30 pips in a few minutes. The pair had been moving in a range between 0.9690 and 0.9730 since Tuesday; it recently dropped quickly and printed a fresh daily low at 0.9670.

The pair remains near the lows, still holding a bearish tone. The decline was boosted by a rally of the Swiss franc across the board.

Between data and Fed’s officials

So far, better-than-expected US data failed to lift the US dollar against the Swiss franc. Initially, the new reading for GDP growth for the second quarter showed a positive rate of 1.4% above the 1.3% expected and higher than the 1.1% previously reported. Initial jobless claims rose marginally to 254K, below the 262K expected. The negative report was the pending home sales data that showed a drop of 2.4% in August as compared to consensus estimates pointing to a flat reading.

Regarding monetary policy, Fed’s D. Lockhart said that the November is a live meeting. He affirmed that he is conformable with a rate hike in the coming meeting. Currently, he does not vote in the FOMC. Jerome Powell, who voted to keep rates unchanged last week said that the central bank can be patient and mentioned that the US economy is in “good shape”. Earlier,  E. George, a hawkish FOMC voter, said it is time for the Fed to hike rates.

Technical levels

 To the downside the pair could face a relevant short-term support area around 0.9660, that capped the decline several times during September; below here support could be seen at 0.9630 (Aug 02 low) and 0.9600 (psychological). On the opposite direction, resistance is now seen at 0.9710 (20-hour moving average), 0.9735 (weekly high) and 0.9790 (Sep 14 high).