- USD / CHF continued its recent decline and fell to the lowest level since June 16.
- The revival in safe haven demand benefited the CHF and put pressure amid a weaker USD.
The pair USD/CHF it has managed to reverse an initial drop in the European session to fresh six-week lows and was last seen trading in neutral territory, around the 0.9055-60 region.
The pair extended this week’s rejection drop from 0.9200 and witnessed some selling during the first half of trading action on Friday. Concerns that the rapidly spreading Delta variant of the coronavirus could derail the global economic recovery continued to weigh on investor sentiment. This, in turn, benefited the safe-haven Swiss franc and put some downward pressure on the USD / CHF pair.
Meanwhile, the momentum of risk reduction in the markets triggered a further downward leg in US Treasury yields in the context of dovish remarks by Fed Chairman Jerome Powell, the Wednesday, falling US bond yields kept US dollar bulls on the defensive. This further contributed to the USD / CHF falling to the lowest level since June 16. That said, the oversold conditions on the intraday charts helped limit any further losses.
The USD / CHF pair managed to find some support near the 0.9040-35 region, although any significant recovery still seems elusive. Given the sustained weakness overnight below the very important 200-day SMA, the bias remains tilted in favor of bearish traders. Therefore, any significant recovery attempt beyond the mentioned support break point could be seen as a selling opportunity and risks fading away fairly quickly.
US bond yields will influence USD price dynamics and give USD / CHF some boost. Traders could follow the signals of the broader market risk sentiment to seize some short-term opportunities around the pair.
Technical levels
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