- USD / CHF saw some selling on Thursday and broke two days of the winning streak.
- The USD remained depressed near multi-week lows amid declining odds of a Fed rate hike.
- Nerves from COVID-19 benefited safe haven CHF and further contributed to intraday sales.
The pair USD/CHF it remained depressed for the middle of the European session and was last seen trading around the 0.9155-60 region, just a few pips above the daily lows.
The pair was unable to capitalize on this week’s recovery move from the 0.9130 region, the lowest level since early March, and came under renewed selling pressure on Thursday. This marked the first day of a negative move in the previous three trading sessions and was sponsored by a combination of factors.
Renewed fears about another dangerous wave of coronavirus infections in some countries continued to weigh on investor sentiment and generated some safe haven flows into the Swiss franc. This, coupled with the prevailing bearish sentiment around the US dollar, put some downward pressure on the USD / CHF pair.
The US dollar languished near multi-week lows amid speculation that the Fed will keep interest rates low for a longer period. Investors now seem convinced by the view that any spike in inflation is more likely to be transitory and have been lowering their expectations of a Fed takeoff earlier than anticipated.
This was reinforced by the fact that a good intraday bounce in US Treasury yields failed to impress the USD bulls. This, in turn, suggests that the path of least resistance for the USD / CHF pair remains to the downside. Therefore, a subsequent dip towards the 200-day SMA, around the 0.9100-0.9095 area, seems like a clear possibility.
Weekly jobless claims fell to 547,000 in the week of April 16, up from 586,000 previously and 617,000 expected, their lowest level in the past 13 months. US bond yields could influence USD price dynamics and give USD / CHF some boost. Traders will follow the signals of the broader market risk sentiment for some short-term opportunities.
Technical levels
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