- The prevalent USD bearish sentiment prompted some fresh selling around USD/CHF on Monday.
- The upbeat market mood did little to weigh on the safe-haven CHF or lend any support to the pair.
The USD/CHF pair inched back closer to multi-year lows, with bears still awaiting a sustained break below the 0.8800 round-figure mark.
The pair met with some fresh supply on the first trading day of 2021 and has now erased a major part of the previous session's recovery gains. The downtick was exclusively sponsored by sustained US dollar selling and failed to gain any respite from the risk-on mood, which tends to undermine the safe-haven Swiss franc.
The likelihood of additional US financial aid package, along with speculations that the Fed will keep interest rates lower for a longer period continued weighing heavily on the greenback. Even a goodish pickup in the US Treasury bond yields did little to ease the prevalent strong bearish sentiment surrounding the greenback.
Meanwhile, the mass distribution of vaccines helped offset worries about the new faster-spreading coronavirus strain. Apart from this, increasing bets for a strong global economic recovery in 2021 continued boosting investors' confidence. The upbeat market mood, however, failed to ease lend any support to the USD/CHF pair.
Market participants now look forward to the release of final US Manufacturing PMI print for a fresh impetus. Traders might further take cues from developments surrounding the coronavirus saga, which, along with the broader market risk sentiment and the USD price dynamics, might produce some short-term trading opportunities around the USD/CHF pair.
Technical levels to watch
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