USD/CHF spikes to session tops, holds comfortably above 0.9400 mark
|- USD/CHF gains some positive traction and turns positive for the third straight session.
- The upbeat market mood undermined the safe-haven CHF and extended some support.
- A modest USD rebound from lows further contributed to the pair’s intraday move up.
The USD/CHF pair rallied around 30 pips from daily swing lows and refreshed daily tops, around the 0.9420 region during the early European session.
The pair managed to attract some dip-buying on the first day of a new trading week and reversed an early dip to the 0.9390 area. The prevalent risk-on environment undermined the perceived safe-haven Swiss franc and was seen as one of the key factors lending some support to the USD/CHF pair.
The global risk sentiment remained well supported by firming expectations that the worst of the coronavirus pandemic was probably over. Moreover, the incoming positive economic data has been fueling hopes of a sharp V-shaped global economic recovery and further boosted investors' appetite.
The optimism, to a larger extent, helped offset concerns about the ever-increasing coronavirus cases across the world and also seemed rather unaffected by worries over a further deterioration in relations between the world's two largest economies. It is worth recalling that the US President Donald Trump on Friday said that there will be no phase-two trade deal with China. Adding to this, China's Foreign Minister threatened to impose sanctions on US lawmakers.
Meanwhile, the latest leg of a sudden uptick over the past hour or so could further be attributed to a modest US dollar rebound from daily lows. Having witnessed some selling through the first half of the trading action on Monday, the greenback managed to find some support at lower levels and provided an additional lift to the USD/CHF pair.
It, however, remains to be seen if the pair is able to capitalize on the move or runs into some fresh supply amid absent relevant market moving economic releases from the US. Hence, it will be prudent to wait for some strong follow-through buying before confirming that the USD/CHF pair might have bottomed out in the near-term and positioning for any further gains.
Technical levels to watch
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