- USD/CHF slides to fresh multi-year lows amid some renewed USD selling bias.
- The safe-haven CHF further benefitted from a selloff in the US equity markets.
- Extremely oversold conditions on the daily chart warrant some caution for bears.
The USD/CHF pair witnessed some selling during the early North American session and dropped to the 0.9110 region in the last hour – the lowest level since May 2015.
The pair failed to capitalize on its attempted intraday recovery move, instead met with some fresh supply near mid-0.9100s amid the emergence of some fresh selling around US dollar. The US Treasury bond yields recorded a steep decline on Thursday and capped the early modest USD rebound.
In fact, the yield on the benchmark 10-year US government bond yield nosedived to the lowest level since early March following the release of the advance US GDP report. The preliminary number showed that the US economy shrank at a record 32.9% annualized pace during the second quarter.
The USD was further pressured by the impasse over the next round of the US fiscal stimulus measures. With only two days left before the expiry of the existing enhanced unemployment provisions, Congressional Republicans and Democrats have been struggling to reach a deal.
Apart from this, a selloff in the US equity markets benefitted the Swiss franc’s safe-haven status and further contributed to the USD/CHF pair’s intraday fall of around 40 pips. US stocks added to the daily losses after the US President Donald Trump proposed to delay the 2020 election due to coronavirus.
The pair has now drifted into the negative territory for the eighth consecutive session, with bears now eyeing a sustained break below the 0.9100 round-figure mark. However, extremely oversold conditions on short-term charts warrant some caution before placing fresh bearish bets.
Technical levels to watch
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