- USD/CHF remained depressed for the third consecutive session on Thursday.
- Hopes for more US fiscal stimulus weighed on the USD and exerted pressure.
- COVID-19 vaccine optimism failed to lend any support or stall the downtrend.
The USD/CHF pair continued losing ground through the early European session and dropped to its lowest level since January 2015, around the 0.8935-30 region in the last hour.
The pair extended this week's retracement slide from the vicinity of the 0.9100 mark and witnessed some follow-through selling for the third consecutive session on Thursday. The ongoing downward trajectory was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.
Wednesday's disappointing ADP report on private-sector employment added to the market worries about the economic fallout from the continuous surge in new COVID-19 cases in the United States. This, in turn, revived hopes for additional US fiscal stimulus and continued weighing on the greenback.
Meanwhile, the latest optimism over the first approval of a vaccine for the highly contagious coronavirus disease did little to undermine the safe-haven Swiss franc or lend any support to the USD/CHF pair. That said, oversold conditions might help limit the fall, at least for the time being.
From a technical perspective, the USD/CHF pair on Wednesday broke through an important horizontal support near the 0.8980 region. The mentioned level constituted the formation of a descending triangle and a sustained break might have already set the stage for a further near-term depreciating move.
Hence, any attempted recovery back towards the triangle support breakpoint might be seen as a selling opportunity. The USD/CHF pair now seems vulnerable to prolong its recent bearish trend and break below the 0.8800 round-figure mark, towards testing the next major support near the 0.8765 region.
Market participants now look forward to the US economic docket, highlighting the releases of Initial Weekly Jobless Claims and ISM Services PMI. The data, along with the US fiscal stimulus headlines, will influence the USD price dynamics and produce some trading opportunities around the USD/CHF pair.
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 holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.