- USD/CHF remained under some heavy selling pressure for the second straight session on Tuesday.
- Weaker risk tone benefitted the safe-haven CHF and was seen as a key factor exerting pressure.
- Tumbling US bond yields prompted some fresh USD selling and contributed to the bearish fall.
The USD/CHF pair tumbled to fresh 10-week lows during the early North American session, with bears now looking to extend the momentum further below the key 0.9500 psychological mark.
The pair added to the previous day's losses and witnessed some follow-through selling for the second consecutive session on Tuesday. A slight deterioration in the global risk sentiment – as depicted by a weaker tone around the equity markets – benefitted the safe-haven Swiss franc and was seen as a key factor exerting pressure on the USD/CHF pair.
The risk-off mood, along with expectations of a dovish outlook from the Fed triggered a fresh leg down in the US Treasury bond yields. This, in turn, kept a lid on early gains for the US dollar, rather prompted some selling at higher levels and further contributed to the USD/CHF pair sharp intrada slide to the lowest level since March 30.
Apart from this, possibilities of some short-term trading stops being triggered on a sustained break below the recent swing lows, around the 0.9545-40 region, further aggravated the bearish pressure surrounding the USD/CHF pair. Meanwhile, oscillators on hourly charts are flashing overbought conditions and warrant some caution for bearish traders.
Moving ahead, market participants might now start repositioning for the next key event risk – the latest FOMC monetary policy update. The Fed is scheduled to announce its policy decision, which will play a key role in influencing the near-term USD price dynamics and help determine the pair's near-term trajectory.
Technical levels to watch
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