USD/CHF steadily moves to 0.9480 region, upside seems limited

• USD/CHF finds some support ahead of mid-0.9400s and edged higher in the last hour.
• Concerns about risking COVID-19 cases, a subdued USD demand might cap the upside.
• Investors look forward to the US macro data, FOMC meeting minutes for some impetus.

The USD/CHF pair edged higher during the early European session and was last seen trading near daily tops, around the 0.9480 region.

The pair stalled previous day’s retracement slide from two-week tops and found some support near the 0.9455 region, albeit might struggle to gain any meaningful traction amid worries about the second wave of coronavirus infections.

Investors remain concerned that a surge in COVID-19 cases could trigger renewed lockdown measures and delay the global economic recovery. This, in turn, weighed on the sentiment and benefitted the Swiss franc’s safe-haven status.

On the other hand, the US dollar bulls remained on the defensive and seemed rather unimpressed by a strong pickup in the US Treasury bond yields. A subdued USD demand might further contribute towards capping the USD/CHF pair.

Even from a technical perspective, the pair has now moved back closer to 200-hour pivotal resistance. This makes it prudent to wait for a subsequent move beyond the key 0.9500 psychological mark before placing any intraday bullish bets.

Market participants now look forward to the US economic docket, highlighting the release of the ADP report and ISM Manufacturing PMI. This will be followed by the release of FOMC meeting minutes later during the US session and provide some impetus.

Technical levels to watch