USD/CHF tumbles to near 2-week lows, closer to mid-0.9900s
| • The US midterm election results weighing heavily on the USD.
• Sliding US bond yields do little to ease the USD bearish pressure.
• Risk-on mood also failed to lend any support or stall the downfall.
The USD/CHF pair faded a knee-jerk bullish spike to an intraday high level of 1.0051 and tumbled to near two-week lows in the last hour.
The results of the US midterm elections continued weighing heavily on the US Dollar and turned out to be one of the key factors exerting some heavy downward pressure on the major.
With Democrats winning control of the House of Representatives and Republicans retaining their majority in the Senate, the prospect of legislative gridlock turned out to be a bearish catalyst for the greenback.
Bearish traders also took cues from declining US Treasury bond yields, with the prevalent risk-on mood, which tends to dent the Swiss Franc's safe-haven status, doing little to lend any support or stall the ongoing slump.
The pair has now retreated around 90-pips from intraday tops and is currently flirting with session lows, around the 0.9960 region. Hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility amid absent relevant market moving economic releases.
Technical levels to watch
Any subsequent weakness is likely to get extended towards the 0.9940 horizontal support, below which the pair is likely to head back towards testing the 0.9900 round figure mark. On the flip side, any attempted recovery might now confront some fresh supply near the parity mark, which if cleared might trigger a short-covering bounce back towards the 1.0050 supply zone.
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