- USD / CHF is witnessing some selling for the third day in a row on Wednesday.
- Hopes of more fiscal stimulus in the US continue to weigh on the USD and put downward pressure on the pair.
- Risk appetite sentiment, amid COVID-19 vaccine optimism, does little to support the pair.
The pair USD/CHF remains under pressure during the European session on Wednesday and falls to new multi-year lows, around the 0.8870 region, at levels not seen since January 2015.
The pair has extended its recent bearish move and has witnessed some sales for the third day in a row on Wednesday. The drop also marks the sixth negative day of the previous seven and is solely due to sustained selling bias around the US dollar.
The growing Confidence Around US Fiscal Stimulus it has been considered one of the key factors that continues to exert some downward pressure on the US dollar. Even a modest rally in US Treasury yields has not provided any respite for USD bulls or offered the pair any support.
In the meantime, the current drop to the lowest level since January 2015 does not appear to be affected by the prevailing sentiment of risk appetite, which tends to weigh on the safe haven Swiss franc. Global risk sentiment remains supported by positive news about COVID-19 vaccines.
The UK became the first Western nation to launch a vaccination campaign on Tuesday. On the other hand, the US Food and Drug Administration (FDA) has released documents that do not indicate new safety or efficacy concerns about the Pfizer / BioNTech vaccine, implying that it will soon be approved for use in the country.
But nevertheless, extreme oversold conditions on short-term charts could prevent investors from opening new bearish positions, helping to limit deeper losses for the USD / CHF pair, At least for the moment. That said, any significant bounce from short coverage could be seen as a selling opportunity.
In the absence of any major economic release from the US, news of US fiscal stimulus will play a dominant role in influencing USD price dynamics. Apart from this, the broader market risk sentiment could also generate some short-term trading opportunities.
USD / CHF technical levels
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