- USD/CHF added to the overnight gains and edged higher for the third straight day.
- A modest pickup in the USD demand turned out to be a key factor driving the major.
- Recoverin in the European equities undermined the CHF and remained supportive.
The USD/CHF pair climbed to near one-week tops during the early European session, with bulls now awaiting some follow-through strength beyond the 0.8900 mark.
A combination of supporting factors assisted the pair to build on the previous day's positive move and edge higher for the third consecutive session on Tuesday. The US dollar was back in demand amid roadblocks for additional US stimulus measures, which, in turn, was seen as a key factor that provided a modest lift to the USD/CHF pair.
Republicans raised objections on the expensive price tag of a $1.9 trillion COVID-19 stimulus plan proposed by the US President Joe Biden. Meanwhile, Democratic Majority Leader Chuck Schumer said that a comprehensive deal could be four to six weeks away. The developments raised doubts about the size and the timing for more US financial aid.
Apart from this, a goodish bounce in the European equity markets undermined demand for the safe-haven Swiss franc and provided an additional boost to the USD/CHF pair. The CHF was further weighed down by downbeat government forecast, anticipating negative GDP development in Q1 2021. The Swiss government’s chief economist, however, expected an improvement in the second quarter and said that the economy will get back to its feet quite quickly.
Meanwhile, the upside remains limited, at least for the time being, as investors now seemed reluctant to place aggressive bets ahead of the FOMC monetary policy decision on Wednesday. This will be followed by the Advance US Q4 GDP report, which will play a key role in determining the next leg of a directional move for the USD/CHF pair.
In the meantime, traders are likely to take cues from Tuesday's release of the Conference Board's Consumer Confidence Index, due later during the early North American session. This, along with developments surrounding the coronavirus saga and the broader market risk sentiment, should produce some short-term trading opportunities around the USD/CHF pair.
Technical levels to watch
|Today last price||0.8892|
|Today Daily Change||0.0012|
|Today Daily Change %||0.14|
|Today daily open||0.888|
|Previous Daily High||0.8893|
|Previous Daily Low||0.8848|
|Previous Weekly High||0.8926|
|Previous Weekly Low||0.8838|
|Previous Monthly High||0.9093|
|Previous Monthly Low||0.8794|
|Daily Fibonacci 38.2%||0.8876|
|Daily Fibonacci 61.8%||0.8865|
|Daily Pivot Point S1||0.8855|
|Daily Pivot Point S2||0.8829|
|Daily Pivot Point S3||0.8809|
|Daily Pivot Point R1||0.89|
|Daily Pivot Point R2||0.8919|
|Daily Pivot Point R3||0.8945|
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