USD/CHF bears flirt with daily lows, around 0.9470 region
- USD/CHF witnessed some follow-through selling for the second consecutive session on Tuesday.
- The USD remained depressed on the back of the Fed’s move to expand its bond-buying program.
- The upbeat market mood might undermine the safe-haven CHF and help limit any deeper losses.
- Investors look forward to the US retail sales and Powell’s testimony for some meaningful impetus.
The USD/CHF pair edged lower for the second straight session on Tuesday and was last seen trading near two-day lows, around the 0.9470 region.
The US dollar added to its overnight losses that came after the Fed announced changes to its bond-buying program and kept exerting some pressure on the USD/CHF pair. The Fed stated that it will start purchasing a diversified range of investment-grade US corporate bonds to ensure credit market liquidity amid the coronavirus pandemic.
The Fed's latest move boosted investors' confidence, which was evident from the prevalent upbeat mood across the global financial markets. This, in turn, undermined demand for traditional safe-haven currencies, including the Swiss franc, and might help to limit any deeper losses for the USD/CHF pair, at least for the time being.
Meanwhile, the risk-on mood was further reinforced by a strong intraday pickup in the US Treasury bond yields, which seemed to have extended some support to the greenback. This could possibly inspire bullish traders and assist the USD/CHF pair to attract some dip-buying.
Moving ahead, market participants now look forward to the US economic docket – highlighting the release of monthly retail sales figures. This will be followed by the Fed Chair Jerome Powell's testimony before the Senate Banking Committee and influence, which might influence the USD price dynamics and produce some meaningful trading opportunities.
Technical levels to watch