USD/CHF hangs near multi-year lows, around 0.8830-25 region


  • USD/CHF has now drifted into the negative territory for the fifth consecutive session.
  • A modest pickup in the USD demand, the underlying bullish mood might help limit losses.

The USD/CHF pair retreated around 30 pips from the early European session swing highs and refreshed daily lows, around the 0.8825 region in the last hour.

Given that the US congressional negotiators are yet to agree over a new coronavirus-relief package, the US dollar witnessed some short-covering bounce on the last trading day of the week. This, in turn, was seen as one of the key factors that assisted the USD/CHF pair to gain some traction during the first half of the trading action on Friday.

The uptick, however, lacked any strong follow-through, instead met with some fresh supply near the 0.8855 region and dragged the USD/CHF pair into the negative territory for the fifth consecutive session. The pair now seems vulnerable to slide further, though near-term oversold conditions warrant some caution before placing fresh bearish bets.

Moreover, a combination of factors might further hold investors from placing aggressive bets and could lead to some near-term consolidation for the USD/CHF pair. The underlying bullish mood in the equity markets, which tends to undermine the safe-haven Swiss franc, might extend some support and help limit deeper losses at least for now.

The supporting factor, to a larger extent, was offset by reports that the US is set to add dozens of Chinese companies, including SMIC, to a trade blacklist. Apart from this, Britain and the European Union struck a downbeat tone about the likelihood of a post-Brexit trade deal, which might further hold investors from taking aggressive risks.

Nevertheless, the USD/CHF pair remains on track to post its fifth consecutive weekly decline. In the absence of any major market-moving economic releases from the US, the US stimulus headline will influence the USD price dynamics. Apart from this, the broader market risk sentiment will also be looked upon for some short-term trading opportunities.

Technical levels to watch

 



Source link

Comments are closed.

0Shares
0 0