Forex: USD/CHF held at 0.9700 on downtrodden Swiss ZEW

FXstreet.com (Barcelona) - The USD/CHF has remained sideways at the 0.9700 level, a key upside mark that has stubbornly halted a prolonged advance for the pair Wednesday. The plot thickened during European trading as weak economic data trickled out of the EMU and Switzerland, though this has effectively failed to break the pair out of a recent consolidation.

The rise for the USD/CHF has remained intact, leading the pair to operate at resistance at 0.9705, then 0.9766, and finally 0.9858. On the pullback, a movement below 0.9552 will initiate supportive structures at 0.9460 ahead of 0.9399.

In the EMU, Gross Domestic Product s.a. (YoY) fell at a rate of -1.0% in Q1, exceeding expectations of -0.9%. Moreover, Gross Domestic Product n.s.a. (QoQ) has yielded a figure of -0.2%, vs. a projection of -0.1%. In Switzerland, the ZEW Survey – Expectations (May) came in at 2.2 In May, vastly underperforming a consensus of 25.0.

According to the UBS Research Team, “The Federal Reserve may become the first major central bank to start exiting unconventional monetary policy. That prospect will encourage investors to cut short USD/CHF positions. We expect the USD/CHF to reach parity at a minimum.”