USD/CHF ends week modestly lower despite USD strength

The Swiss franc is about to end the week marginally higher against the US dollar. The Dollar Index is having the best weekly performance in months but the strength of the greenback was not enough for USD/CHF. 

The pair reached during the week a 6-week high at 0.9768 but failed to hold and pulled back. On Friday dropped from 0.9700 to 0.9675. 

The Swissy strengthened on Monday after the German election created some concerns. The party of Chancellor Merkel won but received a lower percentage than the previous election and Alternative für Deutschland (AfD) a far-right Party, will be represented in the Bundestag for the first time in decades. Political concerns also include Spain. The regional Government of Catalonia has set a referendum on independence for Sunday despite the opposition of the Government of Spain.

Technical outlook 

USD/CHF again failed during the week to consolidate above the 0.9750 area, which continues to show weakens. So far the correction from that area has been limited as price continues to move within the range 0.9650 - 0.9750. 

If the US dollar is finally able to validate a break above 0.9750 it would open the doors for another up leg. While if it drops under 0.9650, a retreat initially toward 0.9620, the 20-day moving average seems likely; below the next strong support is seen at 0.9550/60.