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  • USD/CHF remained depressed for the third consecutive session on Thursday.
  • Hopes for more US fiscal stimulus weighed on the USD and exerted pressure.
  • COVID-19 vaccine optimism failed to lend any support or stall the downtrend.

The USD/CHF pair continued losing ground through the early European session and dropped to its lowest level since January 2015, around the 0.8935-30 region in the last hour.

The pair extended this week’s retracement slide from the vicinity of the 0.9100 mark and witnessed some follow-through selling for the third consecutive session on Thursday. The ongoing downward trajectory was exclusively sponsored by the prevalent bearish sentiment surrounding the US dollar.

Wednesday’s disappointing ADP report on private-sector employment added to the market worries about the economic fallout from the continuous surge in new COVID-19 cases in the United States. This, in turn, revived hopes for additional US fiscal stimulus and continued weighing on the greenback.

Meanwhile, the latest optimism over the first approval of a vaccine for the highly contagious coronavirus disease did little to undermine the safe-haven Swiss franc or lend any support to the USD/CHF pair. That said, oversold conditions might help limit the fall, at least for the time being.

From a technical perspective, the USD/CHF pair on Wednesday broke through an important horizontal support near the 0.8980 region. The mentioned level constituted the formation of a descending triangle and a sustained break might have already set the stage for a further near-term depreciating move.

Hence, any attempted recovery back towards the triangle support breakpoint might be seen as a selling opportunity. The USD/CHF pair now seems vulnerable to prolong its recent bearish trend and break below the 0.8800 round-figure mark, towards testing the next major support near the 0.8765 region.

Market participants now look forward to the US economic docket, highlighting the releases of Initial Weekly Jobless Claims and ISM Services PMI. The data, along with the US fiscal stimulus headlines, will influence the USD price dynamics and produce some trading opportunities around the USD/CHF pair.

Technical levels to watch