During the Asian session, the dollar lost some ground against the Swiss franc: USD / CHF fell to 0.9576, below yesterday’s low of 0.9597. However, this looks more like a consolidation, which reflects the caution of investors in uncertain investment conditions, namely the escalation of the trade war between China and the United States. However, the situation did not prevent traders from opting for long positions in the USD / CHF, as the currency pair increased more than 4.40% from mid-February, from 0.9188 to 0.9597.
The pair is at the peak of the resistance level test (200 day moving average), which currently stands at 0.9658. Taking into account the positive evolution in the options market, together with the increase in the short position in CHF, there is a good chance that the resistance will break up. The 25-delta risk reversal measure (ensuring put call parity remains true) has been continuously improving in all maturities since mid-February. The 1-month meter increased from -1.18% to -0.62% yesterday, while the 6-month meter jumped from -1.36% to -1.03%. The latest data on speculative positioning of the CFTC place the net short position in CHF at 21% (of open interest), compared to 10% of the previous week.
Finally, the growing tensions between China and the US they did not trigger a race towards refuge assets, suggesting that investors trust that the world’s largest economy could withstand the economic shock. The USD / CHF is trading at 0.9588 and the momentum is firmly positive.
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