USD/CHF flirting with daily lows, below mid-0.9700s
- USD/CHF stalls its recent positive move and faces rejection near the 0.9800 mark.
- Some heavy USD selling seemed to be a key factor exerting downward pressure.
- Bulls seemed unimpressed by a strong follow-through rally in the equity markets.
The USD/CHF pair continued losing ground through the early European session and is currently placed near the lower end of its daily trading range, around the 0.9730-25 region.
The pair failed to capitalize on last week's strong positive move of around 300 pips and faced rejection near the 0.9800 round-figure mark, snapping six consecutive days of winning streak. The pair started retreating from the vicinity of the very important 200-day SMA and was being weighed down by some heavy US dollar selling.
The latest optimism over a slowdown in the number of new coronavirus cases in the European hotspots – Italy and Spain – and the centre of the US outbreak – New York – indicated that the pandemic may be reaching its peak. This prompted some aggressive USD long-unwinding and was seen as a key factor weighing on the major.
Meanwhile, the corrective slide from two-week tops seemed rather unaffected by the prevailing risk-on mod, which tends to undermine demand for perceived safe-haven currencies, including the Swiss franc. the global equity markets rallied for the second straight day, albeit failed to impress bulls or lend any support to the pair.
It will now be interesting to see if the pair is able to find any support or the ongoing slide marks the end of the recent bounce from the key 0.9500 psychological mark. In the absence of any major market-moving economic releases, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum on Tuesday.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
