Swiss Franc Capitalizes on Disappointing German Data and Geopolitical Uncertainty
| Action Insight Mid-Day Report 6-26-23 |
Swiss Franc Capitalizes on Disappointing German Data and Geopolitical Uncertainty |
Today sees Swiss Franc making notable gains due to an array of risk-averse factors at play. Disheartening data on German business sentiment fuels concerns about a protracted recession in the country and by extension, the broader Eurozone. While the weekend's events surrounding Wagner mutiny may not have triggered a seismic response in the markets, the ensuing rise in geopolitical uncertainty is hard to overlook. This has prompted an inflow into safe-haven assets like government bonds, consequently driving down major European and US yields. Swiss Franc stands to gain from these dynamics, both as a direct beneficiary of its safe-haven status and from buying pressure against Euro. In other currency market developments, New Zealand Dollar is also on the rise, ranking as the second strongest currency for the day, largely due a rally against Aussie Dollar. Conversely, Sterling is faring poorly as today's weakest performer, with Dollar and Aussie trailing closely. Meanwhile, Yen's performance is mixed, with verbal interventions from Japanese officials cushioning its recent decline. Technically, GBP/CHF's break of 1.1347 support today argues that the rebound from 1.1024 has completed at 1.1502, after rejection by 1.1574 resistance. The development also indicates that corrective pattern from 1.1574 is extending with another falling leg. Immediate focus is now on 55 D EMA (now at 1.1284). Firm break there will bring deeper fall towards 1.1024 cluster support (38.2% retracement of 1.0183 to 1.1574 at 1.1043). In Europe, at the time of writing, FTSE is down -0.01%. DAX is down -0.12%. CAC is up 0.21%. Germany 10-year yield is down -0.0578 at 2.301. Earlier in Asia, Nikkei dropped -0.25%. Hong Kong HSI dropped -0.51%. China Shanghai SSE dropped -1.48%. Singapore Strait Times dropped -0.06%. Japan 10-year JGB yield is dropped -0.0183 to 0.353. |
USD/CHF Mid-Day Outlook Daily Pivots: (S1) 0.8934; (P) 0.8973; (R1) 0.9010; More... USD/CHF dips notably today but stays above 0.8900 temporary low. Intraday bias remains neutral first. Break of 0.8900 will resume the fall from 0.9146 to 0.8818 low or below. But for now, strong support is still expected from 0.8756 long term support to bring rebound. . On the upside, above 0.9011 will bring stronger rise towards 0.9146 resistance. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Corporate Service Price Index Y/Y May | 1.60% | 1.80% | 1.60% | | 23:50 | JPY | BoJ Summary of Opinions | | 08:00 | EUR | Germany IFO Business Climate Jun | 88.5 | 91.2 | 91.7 | 91.5 | | 08:00 | EUR | Germany IFO Current Assessment Jun | 93.7 | 93.5 | 94.8 | | 08:00 | EUR | Germany IFO Expectations Jun | 83.6 | 88 | 88.6 | 88.3 |
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