- A combination of factors failed to assist USD/CHF to build on the early uptick to mid-0.9700s.
- Sliding US bond yields undermined the USD; softer risk tone benefitted the safe-haven CHF.
- Investors now look forward to US inflation figures, Fedspeaks for some trading opportunities.
The USD/CHF pair retreated around 35 pips from three-day tops and dropped to fresh session lows, around the 0.9715 region in the last hour.
The pair struggled to capitalize on its early uptick, instead met with some fresh supply near mid-0.9700s and the intraday pullback picked up some pace during the early European session amid a softer tone surrounding the US dollar.
After hitting a two-week high, the USD edged lower on the back of speculations that the Fed might be forced to push interest rates below zero and was further pressurized by a fresh leg down in the US Treasury bond yields.
Meanwhile, concerns about the second wave of coronavirus infections led to some weakness in the equity markets, which benefitted the Swiss franc’s safe-haven status and further contributed to the USD/CHF pair’s intraday pullback.
Against the backdrop of the pair’s repeated failures near the very important 200-day SMA, the price action suggests that the near-term bearish bias might still be far from being over and supports prospects for a further slide.
Moving ahead, market participants now look forward to the release of the US consumer inflation figures. This along with scheduled speeches by FOMC members might influence the USD price dynamics and produce some meaningful trading opportunities.
Technical levels to watch
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