USD/CHF recovers a major part of early lost ground, back closer to multi-month tops
|- USD/CHF witnessed some profit-taking on Friday amid some aggressive USD long-unwinding.
- The pullback attracted some dip-buying amid a strong recovery in the global risk sentiment.
- The set-up still seems tilted in favour of bulls amid fears of coronavirus-led global recession.
The USD/CHF pair managed to recover around 100 pips from daily lows and has now moved back closer to over three-month tops set earlier this Friday.
The pair stalled its recent strong positive move witnessed over the past two weeks or so and started correcting from the vicinity of the 0.9900 round-figure mark amid some aggressive US dollar long-unwinding.
The Fed's decision to expand the currency swap lines to nine more countries helped eased market concerns about tightening liquidity conditions, which prompted some USD profit-taking and exerted some initial pressure on the major.
However, a goodish recovery in the global risk sentiment, as depicted by strong moves in the global equity markets, weighed on traditional safe-haven currencies, including the Swiss franc, and helped limit deeper losses.
Moreover, mounting fears about the economic fallout from the coronavirus pandemic continued underpinning the greenback's status as the global reserve currency and attracted some dip-buying, supporting prospects for additional gains.
This coupled with the fact that the pair has moved back above the very important 200-day SMA for the first time since early December now seems to have set the stage for a further appreciating move, possibly beyond the 0.9900 round-figure mark.
Technical levels to watch
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