USD/CHF sticks to modest recovery gains near mid-0.8800s, lacks follow-through
- USD/CHF staged a modest bounce after hitting fresh multi-year lows on Wednesday.
- The risk-on environment undermined the safe-haven CHF and extended some support.
- The offered tone surrounding the USD capped the upside amid year-end thin liquidity.
The USD/CHF pair has managed to rebound around 35 pips from daily swing lows and was last seen hovering near session tops, around mid-0.8800s.
Following an early slide to the 0.8815 region, the pair staged a modest recovery and for now, seems to have stalled its recent bearish trajectory to the lowest level since January 2015. The prevalent upbeat market mood undermined demand for the safe-haven Swiss franc and extended some support to the USD/CHF pair.
Investors' appetite for perceived riskier assets remained well supported by the optimistic over a strong global economic recovery in 2021 and hopes for more US stimulus. The already stronger risk sentiment got an additional boost after UK regulators approved the of the AstraZeneca/Oxford coronavirus vaccine.
Apart from this, the uptick lacked any obvious catalyst and remained limited amid the heavily offered tone surrounding the US dollar. Despite the effective rejection of the measure to raise the direct payments to most US households from $600 to $2,000, the likelihood of additional US financial aid continued weighing on the USD.
Moreover, relatively thin liquidity conditions on the back of the year-end holiday season might further hold investors from placing any aggressive bets. This makes it prudent to wait for some strong follow-through buying before confirming that the USD/CHF pair has bottomed out and positioning for any meaningful recovery.
Market participants now look forward to the US economic docket, featuring the second-tier releases of Goods Trade Balance, Chicago PMI and Pending Home Sales. The data might influence the USD price dynamics. This, along with the broader market risk sentiment, will be looked upon for some trading opportunities around the USD/CHF pair.
Technical levels to watch
Reprinted from FXStreet,the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.