- The USD / CHF stops its recent positive development and risks being rejected near the 0.9800 mark.
- Some massive sales in USD appear to be a key factor exerting downward pressure.
- The bulls did not seem impressed by a strong consecutive recovery in the stock markets.
The USD / CHF pair continued to lose ground at the start of the European session and is currently positioned near the lower end of its daily trading range around the 0.9730-25 region.
The pair failed to capitalize on last week’s strong positive move of around 300 pips and faced rejection near the 0.9800 mark, breaking six consecutive days in a winning streak. The pair started to pull out of the very large 200-day SMA and were weighed down by strong sales in US dollars.
The latest optimism about a slowdown in the number of new cases of coronavirus in European hotspots – Italy and Spain – and at the center of the American epidemic – New York – has indicated that the pandemic could reach its peak. This caused some aggressive unwinding of the USD and was considered a key factor weighing on the principal.
Meanwhile, the corrective slide from two-week highs did not appear to be affected by the prevailing risk mod, which tends to undermine the demand for perceived safe haven currencies, including the Swiss franc. global stock markets rallied for the second day in a row, although they failed to impress the bulls or support the pair.
It will now be interesting to see if the pair is able to find support or if the current slide marks the end of the recent rebound in the key psychological rating of 0.9500. In the absence of any major economic publications on the market, the price dynamics in USD could continue to act as an exclusive engine of momentum for the pair on Tuesday.