- USD / CHF was down for the second day in a row amid a strong USD sell bias.
- Lowering the Fed’s rate hike bets, falling US bond yields continued to weigh on the dollar.
- New nerves from COVID-19 benefited the CHF – safe haven and added to the weaker tone.
The pair USD/CHF it maintained its offered tone during the middle of the European session and was last seen hovering around the three-day lows around 0.9150.
The pair added to the modest losses of the previous day and remained depressed for a second consecutive session on Friday amid the strongly offered tone around the US dollar. Expectations that the Fed will keep interest rates near zero for a longer period continued to weigh on the dollar. Aside from this, a further downward leg in US Treasury yields acted as a headwind for the dollar, dragging it toward the multi-week lows set earlier this week.
On the other hand, renewed fears about another dangerous wave of coronavirus infections in some countries continued to weigh on investor sentiment. This was evident by a weaker tone in equity markets, which boosted some safe haven flows into the Swiss franc and put additional downward pressure on the USD / CHF pair. That said, the lack of strong sales tracking warrants some caution before positioning yourself for any further depreciation moves.
From a technical perspective, the inability of the USD / CHF pair to capitalize on a modest rebound from the lowest level since early March suggests that the downward pressure may still be far from over. Therefore, any significant recovery attempt could be considered a selling opportunity. The pair remains vulnerable to prolong its recent pullback from the multi-month highs touched earlier this month and aims to test levels below 0.9100, support marked by the very important 200-day SMA.
Market participants are now looking forward to the US economic agenda, highlighting the release of the flash version of the Manufacturing and Services PMI for April. The data will offer a fresh perspective on how the economy is performing, which, along with US bond yields, will influence USD price dynamics. Apart from this, the broader market risk sentiment could also provide some momentum and allow traders to seize some short-term opportunities around USD / CHF.
Technical levels
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