“¢ The global flight to safety continues to benefit the Swiss Franc.
“¢ The USD remains on the defensive amid sliding US bond yields.
The USD/CHF pair remained under some selling pressure for the third consecutive session on Monday and dropped to near four-week lows in the last hour.
After repeatedly failing to find acceptance above the 1.0200 round figure mark, the pair witnessed some long-unwinding trade and corrected further below the 1.0100 handle during the early European session.
The prevailing risk aversion mood, triggered by the latest escalation in the US-China trade tensions, was seen as one of the key factors benefitting the Swiss Franc’s (CHF) relative safe-haven status and exerting pressure.
The conflict between the world’s two biggest economies intensified further after the US raised tariffs on $200 billion worth of Chinese goods on Friday and China vowed to retaliate, though has not given any details yet.
Worsening trade conflict-led global flight to safety was further evident from the ongoing slump in the US Treasury bond yields, which kept the US Dollar bulls on the defensive and did little to lend any support to the major.
Today’s downtick could also be attributed to some follow-through technical selling, especially after Friday’s decisive break below the 1.0120-25 horizontal support, paving the way for a further near-term depreciating move.
There aren’t any major market-moving economic releases due on Monday and hence, the broader market risk sentiment/USD price dynamics might continue to act as key determinants of the pair’s momentum.
Technical levels to watch
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