USD/CHF slides to two-week lows, around 0.9075 region
|- USD/CHF witnessed some fresh selling on Monday and broke below a multi-day trading range.
- Dovish Fed expectations continued weighing on the USD and exerted some pressure on the pair.
- The upbeat market mood might undermine the safe-haven CHF and help limit deeper losses.
The USD/CHF pair weakened further below the 0.9100 round-figure mark and dropped to two-week lows during the mid-European session. The pair was last seen trading near the lower end of its daily range, around the 0.9080-75 region.
Following a brief consolidation through the first half of the trading action, the pair met with some fresh supply on Monday and extended its recent pullback from the vicinity of the 0.9200 mark. The USD/CHF pair has now confirmed a near-term bearish break below a multi-day-old trading range amid the prevalent US dollar selling bias.
The greenback remained depressed amid speculations that the Fed might have to ease monetary policy further to combat the economic damage caused by the imposition of new COVID-19 restrictions in several US states. This, in turn, was seen as a key factor exerting pressure on the USD/CHF pair, though the upbeat market mood might help limit losses.
The global risk sentiment remained well supported by the latest optimism about a potential early rollout of vaccines for the highly contagious coronavirus disease. This was evident from a bullish move in the equity markets, which tends to undermine demand for the safe-haven Swiss franc and should lend some support to the USD/CHF pair.
In another promising development, AstraZeneca announced this Monday that its vaccine candidate – co-developed with the University of Oxford – was up to 90% effective in preventing the COVID-19 virus if patients were given an initial half dose, followed by a full dose. This warrants some caution for before positioning for any further decline.
Market participants now look forward to the release of the flash version of the US Manufacturing and Services PMI prints for November. The data might influence the USD price dynamics during the early North American session. This, along with the broader market risk sentiment, should produce some meaningful trading opportunities around the USD/CHF pair.
Technical levels to watch
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