USD/CHF steady around 0.8900 amidst risk aversion, eyes 0.9000 on the double bottom formation

The USD/CHF remains steady at around 0.8900 after hitting a daily low of 0.8851 and appears to have bottomed after falling from last year’s highs of 1.0147. As the Asian session begins, the USD/CHF is trading at 0.8906, above its opening price by a minuscule 0.01%.

The main drivers for USD/CHF price action continue to be risk-jitters around the First Republic Bank crisis. Although triggered flows towards the Swiss Franc (CHF), higher US T-bond yields, bolstered the US Dollar (USD), capping the USD/CHF’s fall.

The US economic agenda featured Durable Good Orders for March, which jumped 3.2% MoM, above estimates. Excluding transport orders advanced 0.3%, and stripping defense and aircraft, fell 0.4% MoM. After the release, the USD/CHF bounced off the daily lows and rose above 0.8900.

Later in the New York session, Atlanta’s Fed updated its GDP NOW model, reigniting recessionary worries about the United States economy. The GDPNOW model foresees GDP for Q1 at 1.1% vs. a previous reading of 2.5%.

In the Europan session, the Swiss Economic Sentiment advanced to -33.3 points in April, an improvement compared to -41.3 points in March, according to data from Credit Suisse.

What to watch?

The US economic docket will feature Initial Jobless Claims and the Gross Domestic Product (GDP) Advance for Q1, 2023.

USD/CHF Price Analysis

From a daily chart perspective, a double bottom could be forming. Nevertheless, to cement the case, the USD/CHF must break above the April 19 high at 0.9003. A breach of the latter and the USD/CHF will challenge the 0.9050 figure before testing the 50-day EMA at 0.9103.