- USD/CHF regained traction on Thursday amid a strong pickup in the USD demand.
- The risk-off mood underpinned the safe-haven CHF and capped gains for the major.
The USD/CHF pair traded with a mild positive bias through the early European session and was last seen hovering near the top end of its weekly range, around mid-0.9100s.
Following the previous day’s directionless/two-way price action, the pair managed to regain some positive traction on Thursday and was supported by a strong pickup in the US dollar demand. A setback in the development of a vaccine for the highly contagious coronavirus disease, along with concerns about a rapid rise in new COVID-19 cases boosted the greenback’s demand as the global reserve currency.
However, a sharp turnaround in the equity markets extended some support the Swiss franc’s safe-haven demand and kept a lid on any strong gains for the USD/JPY pair, at least for the time being. The global risk sentiment took a hit on the back of fading hopes of additional US fiscal stimulus, especially after the US Treasury Secretary Steven Mnuchin said that he and Nancy Pelosi remain “far apart” on spending priorities.
Nevertheless, the USD/CHF pair, so far, has managed to hold its neck above 50-day SMA, which should now act as a key pivotal point for intraday traders. Meanwhile, a sustained move beyond the overnight swing high, around the 0.9160-65 region, will set the stage for additional gains and assist the pair to aim back to reclaim the 0.9200 round-figure mark.
Market participants now look forward to the US economic docket, highlighting the release of Philly Fed Manufacturing Index, the usual Initial Weekly Jobless Claims and Empire State Manufacturing Index. The data might influence the USD price dynamics and provide some impetus to the USD/CHF pair. This, along with the broader market risk sentiment, might further contribute to produce some meaningful trading opportunities.
Technical levels to watch
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