USD/CHF holds steady above mid-0.9800s, closer to multi-month tops

• Risk-off mood, broad-based USD weakness exerted some initial pressure on the USD/CHF.
• The US Senate’s failure to pass the COVID-19 bill, sliding US bond yields weighed on the USD.
• A rush to hoard cash extended some support to the greenback and helped limit the downside.

The USD/CHF pair quickly recovered around 75-80 pips from sub-0.9700 levels, albeit lacked any strong follow-through and remained capped below the Asian session swing high.

The pair continued with its struggle to capitalize on its move beyond the 0.9900 round-figure mark, or 3-1/2 month tops and witnessed some intraday pullback in the wake of some US dollar selling bias.

The US Senate’s failure to pass the COVID-19 rescue package bill, coupled with a sharp fall in the US Treasury bond yields exerted some pressure on the greenback and exerted some pressure on the major.

This coupled with the prevailing risk-off environment provided a minor lift to traditional safe-haven currencies, including the Swiss franc, and contributed to the pair's early decline to sub-0.9700 levels.

Persistent fears about the economic fallout from the coronavirus pandemic continued weighed on investors' sentiment and led to yet another round of a brutal selloff across the global equity markets.

However, the global rush to hoard cash amid growing concerns over tightening liquidity extended some support to the greenback's status as the global reserve currency and helped limit the downside.

Currently hovering around the 0.9860-65 region, bullish traders are likely to wait for some strong follow-through buying beyond the 0.9900 mark before positioning for any further appreciating move.

Technical levels to watch