- USD / CHF remains under pressure for the third day in a row on Thursday.
- Hopes for more fiscal stimulus in the US weigh on the USD and put pressure on the pair.
- Optimism for the COVID-19 vaccine does not offer any support or stop the downtrend.
The pair USD/CHF continues to lose ground during Thursday’s European session and falls to its lowest level since January 2015, around the region of 0.8930 / 25.
The pair has extended this week’s retracement slide, from near the 0.9100 level, and has witnessed some continuation sales for the third day in a row on Thursday. The current downward movement is due exclusively to the prevailing bearish sentiment around the US dollar.
Wednesday’s disappointing ADP report on private sector employment added to concerns about Economic Consequences of the Continued Increase in New COVID-19 Cases in the United States. This, in turn, has revived hopes for additional fiscal stimulus in the United States and has continued to weigh on the US dollar.
Meanwhile, the last optimism about the first approval of a vaccine for the coronavirus has done little to weigh on the safe-haven Swiss franc or offer support to the USD / CHF pair. That said, oversold conditions could help limit the slide, at least for now.
From a technical perspective, USD / CHF broke significant horizontal support near the 0.8980 region on Wednesday. The mentioned level constituted the formation of a descending triangle and a sustained breakout might already have set the stage for a new short-term bearish move.
Therefore, any attempt to recover towards the breakout point of the triangle support could be seen as a selling opportunity. The USD / CHF pair now looks vulnerable to extend its recent downtrend and break below the round 0.8800 level, to test the next major support near the 0.8765 region.
Market participants are now awaiting the US economic calendar, featuring releases of initial weekly jobless claims and ISM’s services PMI. The data, coupled with the news on fiscal stimulus in the US, could influence USD price dynamics and generate some trading opportunities around USD / CHF.
USD / CHF technical levels
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