- USD/CHF met with fresh supply at higher levels and was weighed down by a combination of factors.
- Reviving safe-haven demand benefitted CHF and exerted some pressure amid sustained USD selling.
- The USD remained depressed after mixed US data as the focus now shifts to FOMC meeting minutes.
The USD/CHF pair was seen trading near the lower end of its daily trading range during the early North American session, with bears awaiting some follow-through weakness below the 0.9100 mark.
The pair failed to capitalize on its intraday uptick, instead met with some fresh supply near the 0.9135-40 region and was being pressured by a combination of negative factors. The selling bias surrounding the US dollar remained unabated, which, in turn, was seen as one of the key factors exerting pressure on the USD/CHF pair.
The USD bulls failed to gain any respite and remained on the defensive following the release of mixed US economic data. According to the second estimate, the US GDP growth stood at 33.1% annualized pace during the third quarter of 2020. The reading matched advance estimates but was slightly lower than market expectations for 33.2%.
On the other hand, the headline US Durable Goods Orders increased by 1.3% in October and orders excluding transportation also expanded by 1.3%, both surpassing consensus estimates. The positive figures, to a larger extent, were negated by an unexpected jump in the Initial Weekly Jobless Claims and widening US trade deficit.
Meanwhile, a softer tone surrounding the US equity futures provided a modest lift to the safe-haven Swiss franc. This was also cited as another factor behind the USD/CHF pair’s intraday pullback of around 30-35 pips. That said, the downside is likely to remain limited ahead of the latest FOMC monetary policy meeting minutes.
The minutes will be closely scrutinized for clues about any further policy easing by the Fed in December amid concerns about the economic fallout from the continous surge in new coronavirus cases. This will play a key role in driving the near-term sentiment surrounding the greenback and help determine the next leg of a directional move for the USD/CHF pair.
Technical levels to watch
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