- USD/CHF witnessed some selling for the fifth consecutive session on Tuesday.
- Sustained selling around the USD was seen as a key factor exerting pressure.
- The risk-on mood undermined the safe-haven CHF and helped limit the slide.
The USD/CHF pair maintained its offered tone through the first half of the European trading session, albeit has managed to rebound around 15 pips from two-week lows.
The pair extended its recent rejection slide from the 0.9200 mark and remained depressed for the fifth consecutive session on Tuesday amid sustained selling around the US dollar. However, the prevalent risk-on environment undermined the safe-haven Swiss franc and helped limit deeper losses for the USD/CHF pair.
The global risk sentiment remained well supported by the latest optimism over a potential vaccine for the highly contagious coronavirus disease, especially after AstraZeneca resumed the phase-3 trials for its vaccine candidate. Adding to this, Pfizer announced the likelihood of presenting late-stage data for its own vaccine by late October.
The upbeat market mood got an additional boost from Tuesday’s stronger-than-expected Chinese macro data, which reinforced expectations for a V-shaped recovery for the world’s second-largest economy. The pair was last seen trading near the 0.9065-70 region as market participants now look forward to the US economic data for a fresh impetus.
Tuesday’s US economic docket features the release of the Empire State Manufacturing Index and Industrial Production figures. The data might influence the USD price dynamics and assist traders to grab some short-term opportunities. The key focus, however, will remain on the FOMC policy decision and updated economic/inflation projections, scheduled on Wednesday.
From a technical perspective, the USD/CHF pair now seems to have found acceptance below the 0.9070-75 horizontal support and seems vulnerable to slide further. Hence, a slide towards the 0.9035 intermediate support, en-route the key 0.9000 psychological mark, now looks a distinct possibility.
Technical levels to watch
Share
