• The USD/CHF to record the biggest monthly gain since May 2012, up 5.17%.
• A dampened market mood increased the appetite for the safe-haven Swissy as US dollar traders booked profits.
• USD/CHF Price Forecast: A daily close below 0.9700 might open the door for a mean reversion move.

The USD/CHF retreats from YTD highs though clings to the 0.9700 mark despite broad US dollar weakness across the board, driven by traders booking profit as the month-weekly end looms. At 0.9706, the USD/CHF reflects the previously mentioned and is headed to record monthly gains of 5.17%, its largest since May 2012.

Sentiment turned sour once European markets closed. US equities remain on the backfoot, weighed by weak earnings from mega-cap companies like Apple and Amazon. Furthermore, China’s coronavirus outbreak, Federal Reserve aggressively tightening, and the Russia-Ukraine war concerns dented investors’ mood.

In the meantime, the US Dollar Index, a gauge of the buck’s value vs. a basket of its peers, drops below 103.000, down some 0.73%, sitting at 102.912.

During the overnight session, the USD/CHF seesawed around the daily pivot point at 0.9720. However, once European traders took over the market, the Swissy strengthened. The pair reached a daily low around the S1 daily pivot at 0.9670 on news that the US Core Personal Consumption Expenditure (PCE), the Fed’s favorite gauge of inflation, rose lower than estimated. Of late, the greenback recovered some ground, and USD/CHF bulls achieved to hold prices above 0.9700.

USD/CHF Price Forecast: Technical outlook

The USD/CHF is upward biased, as depicted by the daily chart, despite Friday’s fall. However, the steepness of the uptrend threatens to put into play a mean reversion move, further expected as the Relative Strength Index (RSI) within the overbought territory begins to aim lower.

If that scenario plays out, the USD/CHF first support would be June 5, 2020, swing high turned support at 0.9650. A breach of the latter will send the pair towards 0.9600, followed by June 30, 2020, a daily high at 0.9533.

Key Technical Levels