USD/CHF hangs near multi-year lows, above 0.9000 mark ahead of FOMC minutes

• USD/CHF remained depressed for the sixth consecutive session on Wednesday.
• The US fiscal impasses, sliding US bond yields continued undermining the USD.
• The risk-on flow helped limit further losses ahead of the FOMC meeting minutes.

The USD/CHF pair now seems to have entered a bearish consolidation phase and remained depressed near multi-year lows, around the 0.9025-20 region.

The US dollar nursed recent losses to more than two-year lows amid the uncertainty over the next round of the US fiscal stimulus measures. The greenback was further pressured by the ongoing slide in the US Treasury bond yields and growing concerns about the US economic recovery. This, in turn, led to a softer tone surrounding the USD/CHF pair, marking its sixth consecutive day of the downtick.

Despite the negative factor, the pair has still managed to hold its neck comfortably above the key 0.9000 psychological mark. The optimism over a potential vaccine for the highly contagious coronavirus disease remained supportive of the risk-on mood, which undermined demand for the safe-haven Swiss franc and helped limit any further losses amid oversold conditions on short-term charts.

Investors also seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of Wednesday’s release of the latest FOMC meeting minutes. Investors will closely scrutinize the minutes for hints about the US central bank’s next move. The outlook will influence the near-term USD price dynamics and help determine the USD/CHF Pair’s next leg of a directional move.

Meanwhile, bearish traders are likely to wait for some follow-through selling below the 0.9000 mark before positioning for any further near-term depreciating move. Conversely, any attempted recovery bounce might still be seen as a selling opportunity and remain limited near the 0.9080 strong horizontal support breakpoint, now turned resistance.

Technical levels to watch