- USD / CHF witnessed strong selling on Tuesday and extended last week’s retracement decline.
- A pullback in US bond yields weighed on the USD and put pressure on the pair.
- The recovery in safe haven demand benefited the CHF and contributed to the intraday decline.
The pair USD/CHF it maintained its strongly offered tone through the middle of the European session and was last seen trading near the 0.8935-30 region, or at one-week lows.
The pair encountered some new bids on Tuesday and extended last week’s retracement slide from the 0.9045 region, levels beyond the 100-day SMA. A turnaround in US Treasury yields led to widespread weakness in the US dollar, which, in turn, was seen as one of the key factors putting pressure on the USD / CHF pair.
Investors also became cautious amid doubts about a relatively faster US economic recovery following the release of a rather unimpressive US jobs report on Friday. This was seen as another factor that weighed on the dollar, with the bulls ignoring developments to accelerate President Joe Biden’s $ 1.9 trillion COVID-19 aid package.
Apart from this, a modest pullback in equity markets fueled some safe-haven flows into the safe-haven Swiss franc and dragged the USD / CHF into the supply zone of 0.8920-25. Some subsequent selling will nullify the prospects for any further appreciation movement and make the pair vulnerable amid the absence of economic releases to move the market.
Meanwhile, US bond yields could continue to play a key role in influencing USD price dynamics. This, coupled with the broader market risk sentiment, will allow traders to seize some short-term opportunities around the USD / CHF pair.
Technical levels
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