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  • USD/CHF struggled to capitalize on its strong rally and faced rejection near the 0.9200 mark.
  • The USD surrenders gains on the back of the incoming updates on the US election results.

The USD/CHF pair has now retreated towards the lower end of its daily trading range, with bears now awaiting some follow-through selling below the 0.9100 mark.

Having shown some resilience below the 0.9100 mark earlier this Wednesday, the pair rallied over 100 pips intraday day in reaction to the early results of the US presidential election. The outcome dashed hopes of the so-called “blue wave” in the US Congress and forced investors to start buying the US dollar in order to hedge their positions.

This, coupled with the delay in results from several battleground states raised prospects for a period of heightened uncertainty. The USD, however, struggled to preserve its early gains, which, in turn, kept a lid on any further positive move for the USD/CHF pair, instead prompted some fresh selling just ahead of the 0.9200 round-figure mark.

In the latest election updates, Trump’s lead in Michigan got slashed significantly and currently stands at 49.4% as against 48.9% for Democrats candidate Joe Biden. A further shift in the tide was indicated in the latest count from Wisconsin, where 89% of the votes are estimated to be reported and Biden holds a slim +0.4 lead over Trump.

Based on this, a 270-268 victory for Biden is shaping up. This was evident from a modest uptick in the US equity futures, which might undermine the safe-haven Swiss franc. Adding to this, the fact that Trump will certainly contest the final outcome, the uncertain US political environment might continue to benefit the greenback and help limit deeper losses for the USD/CHF pair.

Wednesday’s US economic docket highlights the release of the ADP report on private-sector employment and ISM Services PMI. The data, however, is likely to be overshadowed by the US political developments, which remain a key driver of the broader market risk sentiment and the USD price dynamics.

Technical levels to watch