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  • USD/CHF witnessed some selling on Monday and snapped two days of winning streak.
  • The risk-off mood benefitted the safe-haven CHF and exerted some pressure on the pair.
  • Retreating US bond yields weighed on the USD and contributed to the intraday selling bias.

The USD/CHF pair edged lower during the early part of the European session and refreshed daily lows, around the 0.9265 region in the last hour.

The pair struggled to capitalize on its early uptick or find acceptance above the 0.9300 mark and witnessed a modest pullback on the first day of a new trading week. This marked the first day of a negative move in the previous three and was sponsored by a combination of factors.

Turkish President Tayyip Erdogan’s abrupt decision to replace the hawkish central bank governor with a critic of high-interest rates stunned investors. This, in turn, took its toll on the global risk sentiment and benefitted traditional safe-haven currencies, including the Swiss franc.

On the other hand, sliding US Treasury bond yields kept the US dollar bulls on the defensive and exerted some downward pressure on the USD/HF pair. In fact, the yield on the benchmark 10-year US government bond retreated further from an over one-year high level of 1.754% touched last week.

The USD/CHF pair has now erased a major part of the previous session’s positive move to one-week tops, though any downside seems limited. Investors remain optimistic about the US economic recovery, which should continue to underpin the greenback and extend some support to the major.

Even from a technical perspective, the USD/CHF pair, for now, has managed to hold well above last week’s swing lows near the 0.9215-10 region. This further makes it prudent to wait for some strong follow-through selling below confirming that the pair might have topped out in the near-term.

Moving ahead, Monday’s release of the US Existing Home Sales data, along with the Fed Chair Jerome Powell’s comments and speeches by influential FOMC members will influence the USD. Traders might also take cues from the broader market risk sentiment to grab some short-term opportunities.

Technical levels to watch