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  • USD/CHF regained positive traction on Monday amid a broad-based USD strength.
  • The positive move seemed rather unaffected by the prevalent risk-off environment.

The USD buying interest picked up pace since the early European session and pushed the USD/CHF pair to fresh daily tops, around the 0.9075 region in the last hour.

Following a brief consolidation through the early part of the trading action on the first day of a new trading week, the pair managed to regain traction and was supported by resurgent US dollar demand. Growing market worries that the ever-increasing coronavirus cases could prove detrimental for the already fragile global economy and benefitted the greenback’s reserve currency status.

This comes amid fading hopes for a pre-election US fiscal stimulus and took its toll on the global risk sentiment. The US House Speaker Nancy Pelosi remained optimistic on the stimulus talks, though investors seemed unconvinced that US lawmakers will be able to strike a deal before the US presidential election on November 3 amid strong opposition from Senate Republicans.

The anti-risk flow was evident from a fresh leg down in the equity markets, which tends to underpin demand for the safe-haven Swiss franc, albeit did little to hinder the USD/CHF pair’s intraday positive move. However, expectations of a strong Democratic victory in the US elections might hold bulls from placing aggressive bets and keep a lid on any further gains for the USD/CHF pair.

Even from a technical perspective, the pair has been oscillating in a range over the past four trading session and now seems to have formed a rectangle on short-term charts. This further makes it prudent to wait for some strong follow-through buying before confirming that the USD/CHF pair might have formed a strong base near the key 0.9000 psychological mark and positioning for a further move up.

Technical levels to watch