USD/CHF steadies around mid-0.9200s, well above multi-year lows set earlier
- The Swiss franc benefitted from the coronavirus-led global flight to safety.
- The US bond yields collapsed to historic lows amid Fed rate speculations.
- USD/CHF tumbled to sub-0.9200 levels for the first time since June 2015.
The USD/CHF pair struggled to capitalize on its attempted intraday recovery move, albeit has managed hold above multi-year lows set earlier this Monday.
The pair added to its recent losses and opened with a bearish gap on the first day of a new trading week amid a selloff across the global equity markets. The pair subsequently tumbled to its lowest level since June 2015 and was being weighed down by the global flight to safety.
Bears take a breather amid oversold conditions
Against the backdrop of growing concerns over the continuing spread of the coronavirus, a plunge in oil prices rattled the global financial markets on Monday. This eventually forced investors to take refuge in the so-called safe-haven assets and benefitted the Swiss franc.
Strong demand for traditional safe-haven assets, coupled with firming expectations that the Fed will cut interest rates by another 50 bps on March 18 aggravated the recent slump in the US Treasury bond yields and the prevailing bearish pressure surrounding the US dollar.
As the early volatility settled, extremely oversold conditions extended some support and assisted the pair to rebound around 70-80 pips from sub-0.9200 levels. However, the fact that the attempted recovery lacked any follow-through, the pair still seems vulnerable to slide further.
in absence of any major market-moving economic releases from the US, the broader market risk-sentiment and any fresh developments around the coronavirus saga will play a key role in influencing the pair's momentum on the first day of a new trading week.
Technical levels to watch