- USD / CHF regains traction Thursday amid a strong rebound in USD demand.
- Risk-off sentiment benefits the safe-haven CHF and limits the pair’s gains.
The pair USD/CHF has moved higher during the European session on Thursday and has risen near the 0.9150 region, just below the weekly highs reached the previous day. At the time of writing, the pair is back slightly although it remains positive for the day around the 0.9140 level.
Following good price action in both directions the day before, the pair managed to regain some positive traction on Thursday and has been supported by strong recovery in US dollar demand. The pause in the development of a vaccine for the coronavirus earlier this week, along with the concerns about a rapid rise in new COVID-19 cases, have driven demand for the USD as a global reserve currency.
However, a sharp turn in the stock markets has offered some support to demand for the safe haven Swiss franc and limited strong gains for the USD / CHF pair, At least for the moment. Global risk appetite sentiment has been affected by the Diminished hopes for additional US fiscal stimulus Especially after US Treasury Secretary Steven Mnuchin said he and Nancy Pelosi remain “very far apart” on spending priorities.
However, the USD / CHF pair so far has managed to stay above the 50-day SMA, which should now act as a hotspot for intraday invaders. Meanwhile, a sustained move above the previous day’s high, around the 0.9160-65 region, will set the stage for further gains and help the pair target a recovery from the round 0.9200 level.
Market participants are now looking forward to the US economic calendar, highlighting the release of the Philadelphia Fed Manufacturing Index, the Empire State Manufacturing Index and initial weekly jobless claims. The data can influence USD price dynamics and give USD / CHF some momentum. This, along with broader market risk sentiment, could contribute to generating some significant trading opportunities at the start of the American session.
Credits: Forex Street
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