USD/CHF struggles below 0.9400 mark, seems vulnerable
- USD/CHF remained depressed amid the prevalent selling bias around the USD.
- The risk-on mood failed to impress bulls or provide any respite to the major.
- The technical set-up supports prospects for an extension of the bearish trend.
The USD/CHF pair struggled to gain any meaningful traction and remained well within the striking distance of multi-month lows set early this month, below the 0.9400 mark.
The ever-increasing number of coronavirus cases in the US dampened prospects for a swift recovery for the domestic economy and kept exerting some pressure on the US dollar. Adding to this, a weaker tone surrounding the US Treasury bond yields further undermined the greenback and exerted some pressure on the USD/CHF pair.
Meanwhile, the downside has been limited, at least for the time being, amid the prevalent upbeat market mood. The global risk sentiment remained supported by the latest optimism over a potential COVID-19 vaccine. This, in turn, dented demand for the safe-haven Swiss franc and helped limit deeper losses for the pair.
From a technical perspective, the pair's inability to attract any meaningful buying interest suggests that the near-term bearish pressure might still be far from being over. Hence, a subsequent slide towards testing three-month-old descending channel support, around the 0.9320 region, remains a distinct possibility.
In the absence of any major market-moving economic releases, the broader risk sentiment will continue to influence the CHF's safe-haven demand. This along with the USD price dynamics might produce some short-term trading opportunities.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
