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  • USD/CHF witnessed heavy selling on Tuesday and extended last week’s retracement slide.
  • A pullback in the US bond yields weighed on the USD and exerted pressure on the major.
  • Reviving safe-haven demand benefitted the CHF and contributed to the intraday downfall.

The USD/CHF pair maintained its heavily offered tone through the mid-European session and was last seen trading near the 0.8935-30 region, or over one-week lows.

The pair met with some fresh supply on Tuesday and extended last week’s retracement slide from the 0.9045 region – levels beyond the 100-day SMA. A turnaround in the US Treasury bond yields led to a broad-based US dollar weakness, which, in turn, was seen as one of the key factors exerting pressure on the USD/CHF pair.

Investors also turned cautious amid doubt about a relatively faster US economic recovery following the release of rather unimpressive US jobs report on Friday. This was seen as another factor that weighed the greenback, with bulls shrugging off developments to fast-track President Joe Biden’s $1.9 trillion COVID-19 relief package.

Apart from this, a modest pullback in the equity markets drove some haven flows towards the safe-haven Swiss franc and dragged the USD/CHF pair back closer to the 0.8920-25 supply zone. Some follow-through selling will negate prospects for any further appreciating move and turn the pair vulnerable amid absent market-moving economic releases.

In the meantime, the US bond yields might continue to play a key role in influencing the USD price dynamics. This, along with the broader market risk sentiment, will allow traders to grab some short-term opportunities around the USD/CHF pair.

Technical levels to watch