USD/CHF hangs near multi-month lows, around mid-0.9200s

The USD/CHF pair struggled to register any meaningful bounce and remained depressed near mid-0.9200s – the lowest level since March 10.

The pair prolonged its well-established bearish trend and continued losing ground through the first half of the trading action on Friday. A fresh wave of the global risk aversion trade – as depicted by a weaker trading sentiment around the equity markets – forced investors to take refuge in traditional safe-haven assets and underpinned the Swiss franc.

The recent escalation of diplomatic tensions between the world's two largest economies overshadowed the optimism over a potential vaccine for the highly contagious coronavirus disease. This comes amid worries that the second wave of COVID-19 infections, which dampened prospects for a V-shaped economic recovery and took its toll on the global risk sentiment.

On the other hand, the US dollar was seen struggling near 22-month lows amid concerns that the economic recovery in the US could be grinding to a halt. This coupled with a fresh leg down in the US Treasury bond yields further undermined the greenback, which failed to assist the USD/CHF pair to stage any recovery, despite overstretched conditions.

Market participants now look forward to the US economic docket, highlighting the release of the flash version of PMI prints. The data might influence the USD price dynamics, which along with the broader market risk sentiment might produce some short-term trading opportunities on the last day of the week.

Technical levels to watch