USD/CHF struggles near one-week low, just below 0.9200 amid modest USD weakness

USD/CHF witnessed some selling on Tuesday and dropped to over a one-week low.
A modest USD profit-taking slide was seen as a key factor exerting some pressure.
The cautious mood underpinned the safe-haven CHF and added to the selling bias.
Hawkish Fed expectations should help limit the USD losses and lend some support.

Haresh Menghani FXStreet

The USD/CHF pair dropped to over one-week low in the last hour, with bears now looking to extend the downward trajectory further below the 0.9200 round-figure mark.

Following a brief consolidation earlier this Tuesday, the USD/CHF pair met with a fresh supply during the European session and extended the previous day's retracement slide from the 0.9255-65 hurdle. The US dollar witnessed a modest pullback from a one-week high, which, in turn, was seen as a key factor that exerted downward pressure on the USD/CHF pair.

On the other hand, the prevalent cautious mood around the equity markets benefitted the Swiss franc's safe-haven status and further contributed to the USD/CHF pair's intraday slide. Concerns about the potential economic fallout from the imposition of fresh restrictions in Europe and Asia turned out to be a key factor that weighed on investors' sentiment.

This, to a larger extent, overshadowed reports that two doses of the Pfizer-BioNTech vaccine give 70% protection against the new Omicron variant. That said, growing market acceptance that the Fed would tighten its monetary policy sooner rather than later to contain stubbornly high inflation helped limit the downside for the greenback and the USD/CHF pair.

The markets have been pricing in the possibility for an eventual liftoff by June 2022 and another rate hike as early as November. Investors might also refrain from placing aggressive bets, rather prefer to wait on the sidelines ahead of the highly-anticipated FOMC policy decision on Wednesday. This, in turn, warrants some caution for aggressive bearish traders.

Market participants now look forward to the release of the US Producer Price Index (PPI) for some impetus during the early North American session. Traders will take cues from developments surrounding the coronavirus saga, which will influence the broader market risk sentiment and produce some meaningful trading opportunities around the USD/CHF pair.

Technical levels to watch

USD/CHF

Overview
Today last price	0.9193
Today Daily Change	-0.0033
Today Daily Change %	-0.36
Today daily open	0.9226

Trends
Daily SMA20	0.9255
Daily SMA50	0.9222
Daily SMA100	0.9203
Daily SMA200	0.9181

Levels
Previous Daily High	0.9256
Previous Daily Low	0.9204
Previous Weekly High	0.9275
Previous Weekly Low	0.917
Previous Monthly High	0.9374
Previous Monthly Low	0.9088
Daily Fibonacci 38.2%	0.9237
Daily Fibonacci 61.8%	0.9224
Daily Pivot Point S1	0.9202
Daily Pivot Point S2	0.9177
Daily Pivot Point S3	0.9149
Daily Pivot Point R1	0.9254
Daily Pivot Point R2	0.9281
Daily Pivot Point R3	0.9306

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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