USD/CHF drops below 0.9800 while portraying US dollar pullback
|- USD/CHF registers the second day of losses, extends U-turn from 0.9800.
- The US dollar marks broad losses amid risk reset.
- US PMIs, updates concerning the COVID-19 Bill will be in focus.
With the market’s anti-greenback move in the spotlight, USD/CHF extends the previous day’s losses to 0.9795, down 0.55%, during the early hours of Tuesday’s trading.
Although coronavirus (COVID-19) risks continue to linger, expectations that the US policymakers will soon release the much-awaited relief package, which is likely to near $2 trillion of value, questioned the market’s rush to the US dollar amid earlier risk-off.
Also helping the pair could be the risk of the move reset portrayed by the Asian equities and the US 10-year treasury yields. The US 10-year treasury yields rise nearly 6 basis points (bps) to 0.823% whereas stocks in Asian powerhouses like Japan, China and India are all marking noticeable gains by the press time.
The US Senate failed to agree over the Trump administration’s aid package but President Donald Trump and Treasury Secretary Steve Mnuchin mentioned to be very close to the deal.
It should also be noted that the Fed’s unlimited Quantitative Easing (QE) also weighs on the US dollar as it reduces the supply crunch of the greenback.
Meanwhile, the global cases infected from the deadly virus crossed 372,500 while the death toll also surged beyond 16,380 by the end of Monday.
Moving on, traders will now concentrate more on the COVID-19 Bill headlines while also taking clues from the preliminary readings of the US PMIs for March.
Technical Analysis
Unless breaking beyond 0.9900 on the daily closing basis, the USD/CHF pair remains inside the rising wedge bearish formation that gets confirmation once the quote slips below 0.9650. The recent pullback could be attributed to the Doji formation marked around the multi-month top on Friday.
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