USD / CHF rises to highs of over a week and seeks to extend momentum above 0.9100 level

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The pair USD/CHF has soared to highs of more than a week at the start of the European session on Wednesday, with the bulls now looking to extend momentum above the 0.9100 level. At the time of writing, the pair is holding near the daily highs around the 0.9115 region, at levels not seen since last October 19.

The pair has built on this week’s recovery move, from the 0.9040-35 region, and has gained some continuation traction for the third day in a row on Wednesday. The rally is solely due to the emergence of new purchases around the US dollar and has not appeared to be affected by the prevailing sentiment of risk aversion.

The growing market concern that a second wave of coronavirus infections in Europe and the US could derail the fragile global economic recovery has continued to benefit the US dollar as a global reserve currency. However, the uncertain political situation in the US could prevent investors from opening aggressive bullish positions in the USD.

Surveys have indicated that Democratic candidate Joe Biden is ahead of incumbent President Donald Trump nationally. However, investors are wary of predicting the actual outcome, since the difference is narrow in certain key states. Added to this uncertainty is the possibility that the election result can be challenged.

This probably would further delay negotiations on the next round of fiscal stimulus measures in the United States, which has affected market sentiment. This has been evident by weaker sentiment around equity markets, which could reignite demand for the safe-haven Swiss franc and help limit the rise in the USD / CHF pair.

There is no major economic data release on Wednesday. Therefore, USD price dynamics, along with broader market risk sentiment and developments around the coronavirus saga, will play a key role in influencing the intraday momentum of the USD / CHF pair.

Credits: Forex Street

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