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USD/CHF hangs near weekly lows, around 0.9730 region

  • USD/CHF witnessed some follow-through selling on Thursday amid notable USD supply.
  • The Fed’s unlimited QE, sliding US bond yields kept exerting pressure on the greenback.
  • The cautions mood benefitted the CHF’s safe-haven status and added to the selling bias.

The USD/CHF pair edged lower through the early European session and is currently placed near the lower end of its weekly trading range, around the 0.9730-25 region.

The pair extended this week's retracement slide from the 0.9900 round-figure mark, or YTD tops set on Monday and remained depressed for the third consecutive session amid persistent selling bias around the US dollar.

The Fed's unprecedented QE program to buy unlimited amounts of Treasury bonds and mortgage-backed securities helped ease concerns about tightening liquidity and prompted investors to continue dumping the greenback.

Even the latest optimism over the passage of a massive $2 trillion US economic relief package failed to provide any respite to the USD, while a fresh leg down in the US Treasury bond yields exerted some additional pressure.

On the other hand, the prevailing cautious mood – amid mounting fears over the economic fallout from the coronavirus pandemic – benefitted the Swiss franc's safe-haven status and further contributed to the pair's weaker tone.

It will now be interesting to see if the pair is able to find any support at lower levels or extends its downward trajectory as market participants now look forward to the US economic docket for a fresh impetus.

Thursday's economic docket features the release of the highly anticipated US initial weekly jobless claims. This coupled with the final US Q4 GDP growth figures will influence the USD price dynamics and produce some trading opportunities.

Technical levels to watch

 

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