USD/CHF drops toward 0.9835 as Swiss franc strengthens

• Safe-haven demand: CHF, JPY, Treasuries and gold, all up.
• USD/CHF turns negative after reversing from 12-day highs. 

The USD/CHF pair reached earlier today at 0.9889, the highest level since June 20. The area around 0.9885 became a barrier that the US Dollar was unable to break and weakened triggering a correction.

The recovery of the Swiss franc took place amid an increase in the demand for the Japanese Yen and also US Bonds. The 10-year yield dropped back under 2.0%, approaching multi-year lows. 

The environment pushed USD/CHF to the downside. The pair bottomed at 0.9833, still significantly above yesterday’s opening. As of writing, trades at .9850, off lows but still moving with a bearish bias. 

USD/CHF Levels 

The pair failed two times to hold on top of the 20-day moving average that stands at 0.9870. The mentioned line capped the upside and a correction followed. 

The short-term bias still points to the upside, but USD/CHF needs to hold on top of 0.9870 in order to clear the way to more gains.  On the flip side, the first relevant support might lie at 0.9830 (20-SMA in four hours) and then 0.9775 (short-term uptrend).