- USD / CHF rose for the second day in a row Tuesday amid a modest rally in the USD.
- Nervousness over the coronavirus continues to underpin the USD as a global reserve currency.
- The stability in the stock markets weighs on the demand for the safe haven CHF and favors the rise of the pair.
A modest recovery in USD demand has pushed the USD / CHF pair to one-week highs during the European session on Tuesday, with the bulls now aiming for a move above the round 0.9100 level.
The pair has extended the positive movement of the previous day and has gained some continuation traction for the second day in a row on Tuesday. The rebound has been supported by the emergence of new purchases around the US dollar and signs of stability in the stock markets, which tend to weigh on the safe-haven Swiss franc.
Investors remain concerned that the continued rise in new coronavirus cases around the world could force countries to impose new lockdown restrictions and derail the already fragile global economic recovery. This has been seen as a key factor that has continued benefiting the US dollar as a global reserve currency.
Aside from this, slow progress in the US stimulus talks further weighed on market sentiment and triggered a slide in US equity markets on Monday. However, a modest rebound in US equity futures has signaled a slight improvement in global risk sentiment and has alienated investors from traditional safe haven assets such as CHF.
Despite the supporting factors, the USD / CHF pair lacks bullish conviction amid uncertainty about the actual outcome of the upcoming November 3 US election. It’s worth reporting that the market may have started pricing a clear Democratic win, which in turn could prevent USD bulls from opening aggressive positions.
This makes it prudent to wait for a strong continuation buy before confirming that the USD / CHF pair could have formed a solid foundation near the key psychological 0.9000 level and positioned for any further bullish moves.
Market participants are now awaiting the US economic calendar, which highlights the publication of durable goods orders. This, coupled with broader market risk sentiment, US stimulus news, and developments around the coronavirus saga, could generate some significant business opportunities
Credits: Forex Street
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