USD/CHF rebounds from multi-year lows, lacks follow-through
|- Extremely oversold conditions prompted some intraday short-covering move around USD/CHF.
- The heavily offered tone surrounding the USD kept a lid on the pair’s attempted recovery move.
The USD/CHF pair struggled to capitalize on its goodish intraday bounce of around 65 pips and was last seen hovering around the 0.9200 mark, nearly unchanged for the day.
The pair managed to find some support near the 0.9165 region and stalled its recent bearish trajectory to the lowest level since January 2015. The attempted bounce lacked any obvious fundamental catalyst and was solely led by some near-term short-covering move amid extremely oversold conditions on short-term charts.
However, the heavily offered tone surrounding the US dollar failed to impress bulls, instead kept a lid on any further gains for the USD/CHF pair. Investors continued dumping the greenback amid worries that the continuous surge in coronavirus cases could undermine the economic recovery and speculations of more stimulus by the Fed.
The USD bulls failed to gain any respite from Monday's mixed US Durable Goods Orders data, instead took cues from the ongoing slide in the US Treasury bond yields. This coupled with concerns about worsening US-China relations benefitted the safe-haven Swiss franc and contributed towards capping the upside for the USD/CHF pair.
The price action warrants some caution before confirming that the pair might have bottomed out in the near-term and positioning for any meaningful recovery. Meanwhile, the upbeat mood around the equity markets might help limit any deeper losses, at least for the time being.
Technical levels to watch
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