- USD/CHF witnessed some profit-taking on Tuesday and snapped six days of the winning streak.
- The US political uncertainty kept the USD bulls on the defensive and was seen exerting pressure.
- The upbeat market mood might undermine the safe-haven CHF and help limit any further losses.
The USD/CHF pair continued losing ground through the first half of the European trading session and was last seen hovering near daily lows, just above mid-0.9100s.
Having struggled to find acceptance above the 0.9200 mark, the pair witnessed some long-unwinding trade on Tuesday and for now, snapped six consecutive days of the winning streak. The downfall was exclusively sponsored by the emergence of some fresh selling around the US dollar and seemed unaffected by the prevalent risk-on mood, which tends to undermine the safe-haven Swiss franc.
The greenback gave up some of its recent gains to one-month tops as investors now seemed inclined to take some profits off the table amid the uncertain US political situation. Opinion polls have consistently shown a lead for Democrat challenger Joe Biden over incumbent President Donald Trump. However, a narrow gap in key battleground states has raised prospects for an inconclusive result.
Meanwhile, the global risk sentiment remained well supported by Monday’s upbeat manufacturing PMI prints from major economies. This was evident from strong gains in the equity market. The upbeat market mood, however, did little to impress bullish traders or lend any major support to the USD/CHF pair, albeit might turn out to be the only factor that might help limit deeper losses.
There isn’t any major market-moving economic data due for release from the US on Tuesday. Hence, some repositioning trade ahead of the key event risk might continue to infuse volatility in the markets and assist traders to grab some short-term trading opportunities.
Technical levels to watch
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