The Swiss Franc (CHF) pares recent gains against the US Dollar (USD) on Monday, as fresh frictions in the Middle East are dampening investors’ appetite for risk in an otherwise calm market session.
The USD/CHF pair’s rebound from two-and-a-half-week lows near 0.8000 has extended beyond 0.8050, aiming for the 0.8070 area
Comments from Iranian authorities reiterating their willingness to control the Strait of Hormuz and collect fees from vessels crossing the critical waterway cast a shadow over the fragile ceasefire, as the US rejects that option. Beyond that, fresh hostilities in Lebanon and reciprocal threats between Iran and Israel add pressure on the peace process. In Switzerland, an unexpected increase in the Unemployment Rate, which hit a nearly five-year high at 3.1% in June, from 3% in May, added weight to the Swissie.
Later in the day in the US, the ISM Services PMI is expected to show a moderate slowdown, yet remain at levels consistent with healthy activity. At a later time, Federal Reserve Governor Christopher Waller is expected to meet the press. Technical Analysis: A Morning Start candlestick formation is in progress USD/CHF trades at 0.8054, with recent price action suggesting that the pair is in an A-B-C corrective reversal, following a 5-wave (Elliot Wave) bullish cycle.