- USD/CHF witnessed some selling for the second straight day amid a broad-based USD weakness.
- A pickup in the US bond yields did little to impress the USD bulls or lend any support to the pair.
- The underlying bullish sentiment might undermine the safe-haven CHF and help limit the losses.
The USD/CHF pair maintained its offered tone through the mid-European session and was last seen trading near two-day lows, just below mid-0.8900s.
The pair witnessed selling for the second consecutive session on Friday and extended the previous day's rejection slide from the vicinity of the key 0.9000 mark, or the very important 200-day SMA. Thursday's disappointing labor market data raised doubts about a quick US economic recovery and continued weighing on the US dollar. This, in turn, was seen as one of the key factors exerting pressure on the USD/CHF pair.
Even a goodish pickup in the US Treasury bond yields did little to impress the USD bulls. In fact, the yield on the benchmark 10-year US government bond moved back closer to one-year tops touched earlier this week as investors continue to price in the prospects for the passage of President Joe Biden's $1.9 trillion stimulus package. The USD/CHF pair has now trimmed a part of its weekly gains, though the downside seems limited.
Against the backdrop of expectations for a massive US fiscal spending plan, the impressive pace of coronavirus vaccinations and the slowing pace of infections has been fueling optimism over a strong global economic recovery. This, in turn, remained supportive of the underlying bullish sentiment in the financial markets. Ths risk-on mood might undermine the safe-haven Swiss franc and extend some support to the USD/CHF pair.
Market participants now look forward to the US economic docket, featuring the release of flash PMI prints (Manufacturing and Services) and Existing Home Sales. Apart from this, the US bond yields might influence the USD price dynamics. Traders might further take cues from the broader risk sentiment to grab some meaningful trading opportunities around the USD/CHF pair.
Technical levels to watch
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