- USD/CHF remains under some selling pressure for the second straight session.
- Weaker risk sentiment provided a modest lift to the CHF’s safe-haven status.
- A fresh leg down in the US bond yields capped the attempted USD positive move.
The USD/CHF pair failed to capitalize on its early uptick to the 0.9775 area, rather met with some fresh supply and dropped to three-week lows during the early European session on Wednesday.
The pair extended its recent rejection slide from the vicinity of the very important 200-day SMA, or over two-month tops set on February 20, and witnessed some follow-through selling for the second consecutive session on Wednesday.
USD/CHF weighed down by coronavirus concerns
Meanwhile, the latest leg of a sudden fall over the past hour or so was sponsored by an intraday turnaround in the global risk sentiment, which tends to underpin demand for traditional safe-haven currencies, including the Swiss franc.
The early rebound in the equity markets turned out to be short-lived, rather took a turn for the worst amid growing market concerns over the outbreak of the deadly coronavirus beyond China and its impact on the global economic outlook.
The flight to safety was further reinforced by a fresh leg of a downfall in the US Treasury bond yields. In fact, the yield on the benchmark 10-year bond fell to all-time lows and kept a lid on the early attempted US dollar positive move.
The pair was last seen hovering around the 0.9735-30 region, the lowest level since February 6. It will now be interesting to see if the pair is able to attract any buying at lower levels or the current slide marks a near-term bearish breakdown.
There isn't any major market-moving economic data due for release on Wednesday. Hence, investors will keep a close eye on any fresh developments around the coronavirus saga, which might continue to play a key role in influencing investors' appetite for riskier assets.
Technical levels to watch
Some follow-through selling has the potential to drag the pair further toward the 0.9700 round-figure mark en-route the next major support near the 0.9680 horizontal zone. On the flip side, the 0.9760 level now seems to act as an immediate resistance, above which the pair is likely to aim towards reclaiming the 0.9800 round-figure mark.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD recovers above 0.6750 after Australian jobs data
AUD/USD picks up a late bid and recovers above 0.6750 in Asian trading on Thursday, following the release of mixed Australian employment data. The extended post-Fed US Dollar recovery, amid a cautious market mood, could limit the pair's upside ahead of US data.
USD.JPY jumps toward 144.00 on the road to recovery
USD/JPY gains traction and approaches 144.00 in Thursday's Asian session. The uptick of the pair is bolstered by the impressive US Dollar recovery. Investors shift their attention to the US data and the Bank of Japan interest rate decision on Friday.
Gold price remains on the defensive amid the post-FOMC USD recovery from YTD low
Gold price struggles to lure buyers despite the Fed’s jumbo interest rate cut on Wednesday. A further recovery in the US bond yields underpins the USD and caps the non-yielding metal. Concerns about an economic slowdown, along with geopolitical risks, help limit the downside.
Ethereum attempts recovery following first rate cut in four years
Ethereum is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds recorded $15.1 million in outflows.
Australian Unemployment Rate expected to hold steady at 4.2% in August
The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.