USD/CHF slides to over 1-month lows, around 0.9070 level amid notable USD supply
- USD/CHF witnessed some follow-through selling for the second straight session on Tuesday.
- Uncertainty over the US fiscal stimulus measures undermined the USD and exerted pressure.
- The risk-on mood did little to undermine the safe-haven CHF or lend any support to the pair.
The intraday USD selling bias picked up pace since the early European session and dragged the USD/CHF pair to over one-month lows, around the 0.9075-70 region in the last hour.
The pair failed to capitalize on its early uptick, instead met with some fresh supply near the 0.9110 area and turned lower for the second consecutive session on Tuesday. The downtick dragged the USD/CHF pair away from the 0.9165 supply, or over one-week tops touched in the previous day and was sponsored by the emergence of some fresh selling around the US dollar.
The US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin has been able to narrow their differences on the next round of the US fiscal stimulus measures. Investors, however, seemed unconvinced over the passage of the legislation on a wide-ranging coronavirus relief package in the Republican-controlled Senate.
The uncertainty over additional US fiscal stimulus measures kept the USD bulls on the defensive through the first half of the trading action on Tuesday. Even a strong pickup in the US Treasury bond yields failed to revive the USD demand. A broad-based USD weakness was seen as one of the key factors exerting pressure on the USD/CHF pair.
Meanwhile, a solid rebound in the US equity futures, which tend to undermine demand for the safe-haven Swiss franc, also did little to lend any support or ease the intraday bearish pressure surrounding the USD/CHF pair. With the latest leg down, the pair seems to have found acceptance below the 0.9100 mark and remains vulnerable to slide further.
Market participants now look forwards to the US economic docket, featuring the second-tier releases of Building Permits and Housing Starts. The data, along with developments surrounding the US stimulus package, will influence the USD price dynamics and produce some meaningful trading opportunities around the USD/CHF pair.
Technical levels to watch