- USD / CHF saw some aggressive selling on Thursday amid widespread USD weakness.
- Technical selling below 0.9100 added to the intraday bearish pressure.
- The bullish market mood did little to support or stop the slide ahead of the FOMC.
USD selling pressure accelerated during the mid-Europe session and dragged the pair down USD/CHF to almost two-week lows, around 0.9050 in the last hour.
Following an initial rally to the 0.9130 zone, the pair encountered some new offers on Thursday and extended the previous day’s rejection drop from the 0.9200 zone. The drop was solely sponsored by the strongly offered tone surrounding the US dollar and did not appear to be affected by upbeat market sentiment, which tends to undermine demand for the perceived safe-haven Swiss franc.
Democratic candidate Joe Biden could be moving closer to winning the exciting US presidential election. However, the final results remain unclear amid continued vote counting in several key states. This, coupled with the fact that incumbent Republican President Donald Trump has filed lawsuits and a recount in the battle states, fueled the uncertainty. This, in turn, took its toll on the dollar.
Aside from this, the possibility of some short-term trading stops to trigger on a sustained break below 0.9100 further compounded the downward pressure. Meanwhile, risk appetite, as evidenced by signs of another strong open for US equity markets, did little to impress bull traders or support the USD / CHF pair or halt the sharp intraday decline. .
Going forward, Thursday’s FOMC monetary policy decision, scheduled to be announced later during the US session, will now be seen as an immediate respite for USD bulls. This, coupled with US political developments, could help traders seize some significant opportunities.
Credits: Forex Street
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