- The USD / CHF rose slightly for the sixth consecutive session against the backdrop of a re-establishment of the feeling of global risk.
- The rise in US bond yields supported demand in USD and remained favorable to this rise.
- The bulls now seemed to be waiting for a new catalyst and sustained movement beyond the 200-day SMA.
The USD / CHF pair was seen oscillating in a narrow trading band below the 0.9800 mark at the first European session on Monday.
After a strong positive move of nearly 300 pips last week, the pair now appears to have entered a bullish consolidation phase and has stayed well within striking distance of the nearly two-week highs set for Friday.
The pair traded with a slight positive bias for the sixth consecutive session on Monday and the rally was sponsored by a combination of support factors, including a strong recovery in global risk sentiment.
a slowdown in the number of deaths from COVID-19 breathed a sigh of relief for traders and so did the strong gains in US equity futures, which undermined demand for the safe haven value of the Swiss franc.
Risk sentiment was further enhanced by a satisfactory upturn in US Treasury bond yields, which extended some support to the US dollar and further contributed to the pair’s positive intraday movement.
Meanwhile, lingering concerns about the economic fallout from the coronavirus pandemic could continue to prime the greenback’s status as the world’s reserve currency and support prospects for further gains.
The bulls, however, seemed reluctant, rather preferred to wait for a new catalyst before positioning themselves for the next stage of a movement of appreciation of the pair in the absence of economic publications in movement on the market concerned.
Therefore, it will be prudent to wait for strong follow-up purchases, perhaps beyond the very large 200-day SMA hurdle near the 0.9810 region, to confirm the short-term bullish outlook.