- USD / CHF lacks firm direction and oscillates within a range on the first day of the week.
- Nervousness around covid-19 weighs on investor sentiment and benefits safe haven CHF.
- The decline in US bond yields is weighing on the USD and helping to limit the pair’s rise.
The pair USD/CHF oscillates between lukewarm gains and minor losses during the European session on Monday, remaining with modest losses around the 0.9180-75 region.
Having struggled to find acceptance above the 0.9200 level on Friday, the USD / CHF pair has seen some selling on the first day of a new trading week, pressured by decreased risk appetite. Concerns that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery have weighed on investor sentiment. This has been evident by a weaker tone around equity markets, which has benefited the safe-haven Swiss franc and it has acted as a headwind for the USD / CHF pair.
Meanwhile, the global flight to safety has unleashed a sharp drop in US Treasury yields. In fact, the yield on the 10-year US government bond has reversed a significant part of last week’s gains to the 1.30% level. This, in turn, has kept US dollar bulls on the defensive and helped limit the rise in the USD / CHF pair. That said, the drop is still supported as investors now seem reluctant to open any aggressive positions before the next FOMC meeting.
The Fed is expected to announce its latest monetary policy decision during the American session on Wednesday. The result will play a key role in influencing short-term USD price dynamics and could generate further directional momentum to the USD / CHF pair. Meanwhile, events surrounding the coronavirus saga will drive broader risk sentiment in the market. This, in turn, should allow investors to seize some short-term opportunities.
USD / CHF technical levels
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