The US dollar has crashed against the Swiss franc currency as the greenback sinks close inverse price correlation with the euro currency starts to kick-in once again.
Last week the USDCHF fell sharply to 0.9400, reaching the lowest level since mid-August following comments from the chair of the Swiss National Bank (SNB), Thomas Jordan.
The Swiss Franc became the top performer at the end of week, with the EURCHF pair dropping to as traders pilled into the Swiss Franc as the buck tumbled.
The Chairman of the Governing Board of the Swiss National Bank, said on Friday the central bank is reading to take all necessary measures to bring inflation back into the range of price stability.
Chair Thomas Jordan mentioned they have to take action and mentioned monetary policy is not sufficiently restrictive enough, sending the Swiss franc surging.
The fundamental backdrop is currently not supportive for further the US dollar currency right now as traders price in less aggressive rate hikes and inflation may be peaking.
Bullish sentiment is also starting to reach outrageous levels, as traders going unusual long as the pair sinks. This drop clearly caught traders off guard.
Negative sentiment has dropped to an unbelievable 8 percent. This huge sentiment bias is likely to signal more minor downside for the USDCHF in the short-term.
USDCHF Short-Term Technical Analysis
The four-hour time frame continues to show that the USDCHF pair is breaking through trendline resistance from a large rising price channel, around 0.9700.
Additionally, the moving averages from the 50 and 200-periods on the mentioned time frame are crossing over down. Bulls really need to anchor the price above the 0.9700 level to stop further losses.
USDCHF Medium-Term Technical Analysis
Looking at the daily time frame, we are currently seeing a big rejection from the top of an ascending price range, around the 0.9900 level.
The USDCHF pairs looks to be headed much lower if it fails here, and the bottom of the range is currently located around the 1.0100 level.
A move below the 0.9400 level remains key for the bulls here. The y must defend it to stop a huge decline towards the 0.9000 support area and possibly lower.