The US Dollar Index (DXY) ended the day mixed against a trade-weighted basket of foreign currencies. Price-action managed to rebound off the lows on the back of bullish diverging hourly studies, forming a daily hammer formation. While follow-through is needed to confirm this candlestick base formation, only back above the 20-day moving average delays weakness. Dollar bears will look to test the mid-78 region, where the 50% retracement and 50-day moving average lie.
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The Swiss Franc was the strongest currency on the day following the government's upgrade for future growth. The Swissy was up nearly one percent against a trade-weighted basket of currencies. More importantly, both the GBP/CHF and EUR/CHF are approaching their all-time lows. These pairs are worth watching in the upcoming sessions especially with the Swiss National Bank due to meet later this week.
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The British Pound, meanwhile, was among the weakest performers. The GBP/USD rejected at 50-day moving average resistance and the 50% retracement level for the second consecutive day. The pair continues to trade in a one-week upward tilting channel. Losing formation support would violate the current choppy recovery and exposes the 1.57 handle.
