USD / CHF falls to multi-day lows, below 0.9100

• USD / CHF witnessed a dramatic reversal from the 0.9160-65 supply zone.
• The emergence of some new USD sales was seen as putting pressure on the pair.
• Risk appetite led by rising US bond yields failed to impress USD bulls.

The USD / CHF pair continued to lose ground during the middle of the European session and fell to four-day lows in the last hour, with bears now looking to extend momentum below 0.9100.

The pair continued its struggle to break out of the 0.9160-65 trading zone and witnessed a dramatic intraday reversal from the one-week highs on the first day of a new trading week. The pullback was solely sponsored by the surge in some new US dollar sales and failed to get any respite from the prevailing climate of risk appetite, which tends to undermine the safe-haven Swiss franc.

The USD was unable to capitalize on last week’s gains of around 0.7%, and instead witnessed a strong sell off following the US political uncertainty and was seen as one of the key factors sparking an aggressive trade in long rally around USD / CHF. Even a strong intraday rally in US Treasury yields did little to impress USD bulls or provide support for the pair.

Meanwhile, reviving hopes for an additional US fiscal stimulus package, coupled with expectations for a vaccine for the highly contagious coronavirus disease by the end of this year, boosted investor sentiment. This, in turn, was evident from a rally in equity markets, although it failed to alleviate the intraday downward pressure surrounding the USD / CHF pair.

There is no important economic data that moves the market that will be published on Monday. Therefore, USD price dynamics could continue to act as a unique driver for the USD / CHF pair. However, the flow of risk appetite could extend some support and help limit deeper losses, warranting some caution for bearish traders or positioning for any further depreciation moves.