• The US dollar bounces up from 0.9170 and approaches 0.9200 area.
• The Swiss franc appreciates as market sentiment sours.
• USD/CHF: Below 0.9215, further corrective weakness is likely– Credit Suisse.

The US dollar is attempting to set a bottom at 0.9170 five-week lows on the late US trading session. The pair has pared previous losses, returning to 0.9185 and trading nearly flat on daily charts.

Risk aversion buoys the Swiss franc

The Swiss Franc appreciated earlier today, favored by the adverse market sentiment. Unlike previous sessions, quarterly earnings have failed to distract the market from the risks of surging inflation pressures and supply chain bottlenecks, which has reflected in higher demand for safe havens like the Swiss franc and the Japanese yen.

Macroeconomic data has been unable to lift the greenback, with releases from the US sending mixed signals. On the one hand, weekly jobless claims have declined against expectations, to reach 19-month lows, and existing home sales increased 7% to 6.29 million in September, the highest level since January. The Philadelphia Fed Manufacturing index, however, deteriorated in September, due, in part to supply shortages.

USD/CHF: Confirmation below 0.9215 would increase bearish pressure – Credit Suisse

From a technical perspective, the FX Analysis team at Credit Suisse points out to key support at 0.9215: “Whilst our core outlook stays bullish, we cannot rule out further corrective weakness whilst below 0.9274 and more important support if the market does manage to close below 0.9214 is at the 200-day average at 0.9139, which is expected to hold if reached.”

Technical levels to watch