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  • USD/CHF prolonged this week’s positive move and gained traction for the third straight day.
  • Coronavirus jitters continue to benefit the greenback’s status as the global reserve currency.
  • The prevalent risk-off mood could revive demand for the safe-haven CHF and cap the upside.

The USD/CHF pair shot to over one-week tops during the early European session, with bulls now looking to extend the momentum further beyond the 0.9100 mark.

The pair built on this week’s recovery move from the 0.9040-35 region and gained some follow-through traction for the third consecutive session on Wednesday. The uptick was exclusively sponsored by the emergence of some fresh buying around the US dollar and seemed rather unaffected by the prevalent risk-off environment.

Growing market worries that the second wave of coronavirus infections in Europe and the US could derail the already fragile global economic recovery continued benefitted the greenback’s reserve currency status. However, the uncertain US political situation might hold traders from placing aggressive USD bullish bets.

The incoming polls have been indicating that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump nationally. However, investors remain wary of predicting the actual outcome as the gap is narrow in certain key swing states. Adding to the uncertainty is the possibility that the election outcome can be contested.

This would likely further delay negotiations on the next round of the US fiscal stimulus measures, which dampened the market mood. This was evident from a weaker trading sentiment around the equity markets, which could revive demand for the safe-haven Swiss franc and contribute towards capping the upside for the USD/CHF pair.

There isn’t any major market-moving economic data due for release on Wednesday. Hence, the USD price dynamics, along with the broader market risk sentiment and developments surrounding the coronavirus saga will play a key role in influencing the USD/CHF pair’s intraday momentum.

Technical levels to watch