USD/CHF turns to the downside, approaches weekly lows ahead of ECB

A weak US dollar pushed USD/CHF to drop toward the lows of the current week. After moving sideways around 1.0100 during hours the pair broke to the downside, falling below the short-term support at 1.0085. 

The pair bottomed at 1.0065, less than 20 pips above yesterday’s lows. Currently, it trades at 1.0075, where the 20-day moving average stands. A consolidation below could open the doors for a test of 1.0050 and below here, to the parity level. 

To regain the initiative, greenback needs to confirm levels on top of 1.0105; above the next resistance area to watch is 1.0170/75. 

Volatility ahead? 

On Monday, after the Italian referendum USD/CHF jumped to 1.0180 but quickly pulled back to the previous range. During the last days, it has been moving sideways, near the 1.0100 zone. 

On Thursday, the European Central Bank (ECB) will meet. Important decisions regarding the purchase program are expected. Also, ECB staff will present new projections. Draghi will explain the decision and then will answer questions from journalists. What happens at the ECB impacts on the euro and also on the Swiss franc. The Swissy tends to be more volatile than the euro after the ECB.