USD/CHF slumps to 6-year lows near 0.8760 ahead of key US data

• USD/CHF continues to push lower for third straight day.
• US Dollar Index extends slide to fresh multi-year lows.
• Eyes on key US data releases and FOMC Minutes.

The USD/CHF pair closed the first two days of the week lower and continued to push lower on Wednesday with the greenback struggling to find demand. As of writing, the pair was trading at its worst level since January 2015 at 0.8758, losing 0.29% on a daily basis.

USD selloff remains intact

The greenback stays on the back foot as the runoff election in Georgia points out to a Democratic majority in the US Senate, which is likely to open the door for additional stimulus spending. The US Dollar Index (DXY), which lost 0.5% on Tuesday, is currently down 0.21% at 89.25.

Later in the session, the ADP will publish the December Employment Change data for the US ahead of the IHS Markit’s Services PMI report. Moreover, the FOMC will release the Minutes of the December meeting. 

Although it doesn’t look like the DXY is getting ready for a decisive rebound any time soon, USD/CHF’s downside could remain limited with investors refraining from taking long CHF positions amid a possible Swiss National Bank (SNB) intervention.

Following the last policy meeting of 2020, the SNB reiterated that it remains willing to intervene more strongly in the foreign exchange market while taking the overall exchange rate situation into consideration.

Technical levels to watch for