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  • A combination of factors prompted some fresh selling around the USD/CHF on Monday.
  • The risk-off mood benefitted the safe-haven CHF and exerted some downward pressure.
  • Sliding US bond yields undermined the USD and contributed to the pair’s offered tone.

The USD/CHF pair edged lower through the early European session and was last seen trading near the lower end of its daily range, just above the key 0.9500 psychological mark.

The pair failed to capitalize on last week’s strong recovery move of around 180 pips from three-month lows and witnessed some fresh selling on the first day of a new week. The downtick was sponsored by a combination of factors, including the prevalent risk-off environment and some renewed US dollar selling bias.

Fears about the second wave of the coronavirus outbreak and the possibility of renewed lockdowns to curb the spread dampened prospects for a sharp V-shaped economic recovery. This comes on the back of the Fed’s gloomy outlook, which triggered a fresh wave of the global risk-aversion trade and benefitted the safe-haven Swiss franc.

Meanwhile, the global flight to safety was further reinforced by the ongoing downfall in the US Treasury bond yields. This, in turn, undermined the USD demand and further contributed to the USD/CHF pair weaker tone. Bearish traders now await a sustained break below the 0.9500 mark before positioning for any further depreciating move.

There isn’t any major market-moving economic data due for release on Monday. Hence, the broader risk sentiment, along with the USD price dynamics might continue to play a key role in influencing the USD/CHF pair’s momentum and produce some short-term trading opportunities.

Technical levels to watch

 

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