KEY POINTS OF THE ARTICLE:

• General Context: China counteracts the dollar's recovery
• Today's currency: USD/CHF: the decline continues but a bullish divergence appears

Currency Table-Time Horizon: Daily

GENERAL CONTEXT: CHINA COUNTERACTS THE RECOVERY OF THE DOLLAR

The dollar fell on Tuesday against major currencies after benefiting from its safe-haven status with the decline in global stock markets on Monday. China has set the yuan's official exchange rate at its highest level since dropping its peg in 2005, which has helped support demand for Asian currencies.

The Australian and New Zealand dollars are the winners among the major currencies, with the people's Bank of China (PBOC) encouraging the sale of dollars in the market.

Previously, the greenback had found support, as concerns about rising Covid-19 cases and uncertainty over the second round of U.S. elections in Georgia led to a pullback in U.S. stocks from highs reached earlier this year and boosted demand for safer assets. Volatility has gripped markets around the world, causing stocks to fall, amid fears that an increase in coronavirus cases could hamper the nascent economic recovery. The United Kingdom has decided to implement a new lockdown. Traders were also nervous ahead of the second round of elections in Georgia, which could determine whether the Democrats have control of Congress, which will or will not allow Joe Biden to fully implement his economic program.

TODAY'S CURRENCY: USD/CHF: THE DECLINE CONTINUES BUT A BULLISH DIVERGENCE APPEARS

The Swiss franc dollar was only slightly impacted by yesterday's volatility continuing its decline towards the horizontal support corresponding to a level dating back to 2014. Moving averages are aligned to the downside and prices are moving below confirming the downward trend.

However, a bullish divergence has appeared on the RSI which warns of a possible short-term rebound. The negative scenario would be abandoned on a return and a crossing of the old support becoming resistance according to the principle of polarity at 0.8985

Evolution of the dollar against the Swiss franc in daily data: