USD/CHF retreats from 1-month tops, holds steady above 0.8900 mark
|- USD/CHF failed to preserve intraday gains to over one-month tops amid the prevalent cautious mood.
- Concerns about a surge in COVID-19 cases weighed on sentiment and benefitted the safe-haven CHF.
- A modest pickup in the USD demand extended some support and helped limit losses for the major.
The USD/CHF pair retreated around 20-25 pips from daily tops and is currently placed near the lower end of its intraday trading range, around the 0.8900 mark.
The pair struggled to capitalize on its intraday uptick to over one-month tops, instead met with some fresh supply near the 0.8925 region amid the prevalent cautious mood. Concerns about the potential economic fallout from the ever-increasing COVID-19 cases weighed on investors' sentiment. This, in turn, benefitted the safe-haven Swiss franc and capped the upside for the USD/CHF pair.
Even Monday's better-than-expected Chinese GDP print, showing that the world's second-largest economy recorded a growth of 6.5% during the October-December period, did little to shift the market mood. That said, a modest pickup in the US dollar demand extended some support to the USD/CHF pair and might turn out to be the only factor helping limit the downside, at least for the time being.
In fact, the USD dollar held firm near a four-week high and seemed rather unaffected by the recent pullback in the US Treasury bond yields. This makes it prudent to wait for some strong follow-through selling before confirming that the USD/CHF pair's recovery momentum from multi-year lows has already run out of the steam and positioning for any further depreciating move.
In the absence of any major market-moving economic releases, developments surrounding the coronavirus saga will play a key role in driving the broader market risk sentiment and influence demand for the safe-haven CHF. This, along with the USD price dynamics, will also be looked upon for some short-term trading opportunities around the USD/CHF pair.
Technical levels to watch
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