USD/CHF slides below mid-0.9000s, back closer to multi-week lows set on Wednesday

The USD/CHF pair extended its sharp intraday pullback and slipped below mid-0.9000s in the last hour, back closer to multi-week lows set earlier this week.

The pair failed to capitalize on its early uptick, instead witnessed a dramatic intraday turnaround from the vicinity of the 0.9100 mark amid the emergence of some fresh selling around the US dollar. Despite the slow progress in the US stimulus talks, the optimism over the first approved treatment for COVID-19 dented the greenback's status as the global reserve currency.

It is worth reporting that Gilead Sciences received US FDA approval on Thursday for its antiviral therapy to treat the highly contagious coronavirus disease. Adding to this, growing expectations of a strong Democratic victory in the US elections further undermined the buck, which, so far, has failed to gain any respite from an uptick in the US Treasury bond yields.

Meanwhile, the combination of positive factors boosted investors' confidence and the same was evident from a positive tone around the equity markets. The risk-on mood, which tends to drive flows away from the safe-haven Swiss franc, however, did little to lend any support or ease the intraday bearish pressure surrounding the USD/CHF pair.

The pair's inability to attract any buying interest supports prospects for an extension of the ongoing downfall. Hence, some follow-through weakness back towards weekly lows, around the 0.9025 region, en-route the key 0.9000 psychological mark, looks a distinct possibility.

Technical levels to watch