USDCHF’s recovery from 0.9800 remains capped below 0.9870

• The dollar attempts to bounce up from 0.9800 have found resistance at 0.9780.
• The market has turned cautious awaiting the results of the US elections.
• USDCHF is under mounting downside pressure – Credit Suisse.

The US dollar is attempting to set a bottom at 0.9800, following a 2.7% sell-off on the previous three days, although the pair has been unable to extend past 0.9870 previous resistance area. On the daily chart, the USDCHF remains practically flat, trading at 0.9850 at the time of writing.

Investors are awaiting US CPI and mid-term elections

Market sentiment has turned cautious on Wednesday, as investors await the outcome of the US mid-term elections. Recent news has shown better than expected results for the Democrats, yet with the control of the US Congress and the Government’s agenda still in the air.

On the macroeconomic front, in the absence of key releases, the focus is on Thursday’s US Consumer Prices Index figures. The increasing speculation about a potential dovish pivot by the Federal Reserve has boosted the interest in these figures, and therefore, an unexpected reading might pose a significant increase in dollar volatility.

USD/CHF is under mounting downside pressure – Credit Suisse

From a wider perspective, FX analysts at Credit Suisse see the pair under increasing negative pressure: “We think that the downside pressure is mounting. Key support is seen at the 55-day average and the recent price low at 0.9840/38, a close below which would then be seen to trigger a bearish ‘double top’ and likely clear way to 0.9737 next and potentially towards the 200-day average at 0.9616.”

Technical levels to watch