USD/CHF bounces off multi-day low, remains below 0.9000 mark amid subdued USD demand

USD/CHF attracts some dip-buying on Monday and reverses a major part of its intraday losses.
The optimism over US-China relations weighs on the safe-haven CHF and lends some support.
US debt ceiling woes weigh on the USD and might keep a lid on any meaningful recovery move.

Haresh Menghani FXStreet

The USD/CHF pair recovers a major part of its intraday losses to a multi-day low and trades around the 0.8975-0.8970 region, down nearly 0.25% for the day, during the early North American session.

Against the backdrop of worries about a global economic slowdown, a surprise breakdown in the US debt ceiling negotiations weigh on investors' sentiment and drives some haven flows towards the Swiss Franc (CHF). Apart from this, subdued US Dollar (USD) price action, exerts some downward pressure on the USD/CHF pair. The US debt ceiling woes, along with less hawkish remarks by Federal Reserve (Fed) Chair Jerome Powell on Friday, triggers a fresh leg down in the US Treasury bond yields and keeps the USD bulls on the defensive.

Speaking at a Fed research conference, Powell said that it is still unclear if interest rates will need to rise further amid uncertainty about the impact of past hikes and recent bank credit tightening. Furthermore, Minneapolis Fed President Neel Kashkari is out with his take this Monday, saying that it was a close call on whether he will be in favour of hiking the policy rate one more time in June or pausing. That said, the optimism over a potential improvement in US-China relations lends support to the USD/CHF pair and helps limit any further losses.

Spot prices attract some buyers near the 0.8940 region, though any meaningful upside still seems elusive ahead of a key meeting between President Joe Biden and House Republican Speaker Kevin McCarthy to discuss the debt ceiling. Apart from this, the US bond yields will influence the USD price dynamics and provide some impetus to the USD/CHF pair in the absence of any relevant market-moving economic releases from the US. This, along with the broader risk sentiment should allow traders to grab short-term opportunities around the pair.

Technical levels to watch

USD/CHF

Overview
Today last price	0.8974
Today Daily Change	-0.0020
Today Daily Change %	-0.22
Today daily open	0.8994

Trends
Daily SMA20	0.8933
Daily SMA50	0.9034
Daily SMA100	0.9151
Daily SMA200	0.9403

Levels
Previous Daily High	0.9059
Previous Daily Low	0.8975
Previous Weekly High	0.9063
Previous Weekly Low	0.892
Previous Monthly High	0.9198
Previous Monthly Low	0.8852
Daily Fibonacci 38.2%	0.9007
Daily Fibonacci 61.8%	0.9027
Daily Pivot Point S1	0.896
Daily Pivot Point S2	0.8925
Daily Pivot Point S3	0.8876
Daily Pivot Point R1	0.9044
Daily Pivot Point R2	0.9093
Daily Pivot Point R3	0.9128

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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