- USD/CHF struggled to preserve early modest gains and faced rejection near 100-day SMA.
- Some intraday USD selling bias seemed to be the only factor exerting downward pressure.
- The downfall of around 65 pips seemed unaffected by a strong rally in the equity markets.
The USD/CHF pair extended its intraday pullback from over one-week tops and refreshed daily lows, around the 0.9660 region in the last hour.
The pair failed to capitalize on its early uptick to the 0.9725 region, instead faced rejection near 100-day SMA and has now retreated around 60-65 pips from intraday highs amid intensifying selling pressure around the US dollar.
The latest optimism over the treatment for COVID-19 virus, combined with the US President Donald Trump’s plan for reopening the economy boosted investors confidence and prompted some USD long-unwinding trade.
The greenback was further weighed down by an intraday turnaround in the US Treasury bond yields. This coupled with possibilities of some technical selling below the 0.9700 mark seemed to have aggravated the intraday bearish pressure.
Meanwhile, the downtick seemed rather unaffected by a strong rally in the equity markets, which tends to undermine the Swiss franc’s safe-haven demand, albeit might turn out to be the only factor that might help limit deeper losses.
At current levels, the pair might be headed for a near flat closing for the week and form a Doji candlestick on the weekly chart, pointing to indecision among traders over the pair’s next leg of a directional move.
Technical levels to watch
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