- A combination of factors prompted some fresh selling around the USD/CHF on Monday.
- The risk-off mood benefitted the safe-haven CHF and exerted some downward pressure.
- Sliding US bond yields undermined the USD and contributed to the pair’s offered tone.
The USD/CHF pair edged lower through the early European session and was last seen trading near the lower end of its daily range, just above the key 0.9500 psychological mark.
The pair failed to capitalize on last week's strong recovery move of around 180 pips from three-month lows and witnessed some fresh selling on the first day of a new week. The downtick was sponsored by a combination of factors, including the prevalent risk-off environment and some renewed US dollar selling bias.
Fears about the second wave of the coronavirus outbreak and the possibility of renewed lockdowns to curb the spread dampened prospects for a sharp V-shaped economic recovery. This comes on the back of the Fed's gloomy outlook, which triggered a fresh wave of the global risk-aversion trade and benefitted the safe-haven Swiss franc.
Meanwhile, the global flight to safety was further reinforced by the ongoing downfall in the US Treasury bond yields. This, in turn, undermined the USD demand and further contributed to the USD/CHF pair weaker tone. Bearish traders now await a sustained break below the 0.9500 mark before positioning for any further depreciating move.
There isn't any major market-moving economic data due for release on Monday. Hence, the broader risk sentiment, along with the USD price dynamics might continue to play a key role in influencing the USD/CHF pair's momentum and produce some short-term trading opportunities.
Technical levels to watch
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
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.