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USD / CHF rises around the 0.9075 region

  • USD / CHF regains positive traction on Monday amid widespread USD strength.
  • The positive move does not appear to be affected by the prevailing sentiment of risk aversion.

USD buying interest has accelerated during the European session on Monday and has led the pair USD / CHF to new daily highs around 0.9075 region. At the time of writing, the pair retreats slightly towards the 0.9065 area, still positive on the day.

Following a brief consolidation during the early part of price action on the first day of a new week, the pair has managed to regain traction and has been seen supported by resurgence in demand for the US dollar. The growing market concerns that the increase in the number of new coronavirus cases could prove detrimental to the already fragile world economy, it has benefited the US dollar as a global reserve currency.

This occurs in the middle of the Diminished Hopes for US Fiscal Stimulus Before Elections, which has affected global risk sentiment. The Speaker of the US House of Representatives, Nancy Pelosi, remained optimistic about the stimulus talks, although investors do not seem convinced that US lawmakers can reach an agreement before the US presidential election on November 3 in amid strong opposition from Senate Republicans.

The flow of risk aversion has been evident by a further downward movement in equity markets, tending to underpin demand for the safe-haven Swiss franc, although it has done little to limit the positive intraday movement of the USD / CHF pair. However, expectations of a strong Democratic victory in the US elections could prevent the bulls from opening aggressive positions and limiting any further gains for the USD / CHF pair.

Even from a technical perspective, the pair has been swinging within a range for the last four trading days and now appears to have formed a rectangle on the short-term charts. This makes it prudent to wait for a strong continuation buy before confirming that the USD / CHF pair could have bottomed out near the key psychological 0.9000 level and positioned for a further move to the upside.

USD / CHF technical levels

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Credits: Forex Street

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