USD/CHF slides further below mid-0.9500s, lowest since late March
- USD/CHF remained under some selling pressure for the second straight session on Tuesday.
- A slight deterioration in the global risk sentiment boosted demand for the safe-haven CHF.
- Dovish Fed expectations led to a sharp fall in the US bond yields and further inspired bears.
- The intraday fall to 10-week lows seemed unaffected by a goodish pickup in the USD demand.
The USD/CHF pair added to the previous day's losses and witnessed some follow-through selling for the second consecutive session on Tuesday. The intraday slide picked up pace during the early European session and pushed the pair further below mid-0.9500s, or 10-week lows.
As investors digested the recent optimism over a sharp V-shaped recovery for the global economic recovery, a modest pullback in the equity markets forced investors to take refuge in traditional safe-haven assets. The global flight to the safety provided a goodish lift to the Swiss franc and was seen as one of the key factors exerting pressure on the USD/CHF pair.
Meanwhile, investors also seemed to price in the possibility of a very dovish outlook from the Fed at the end of a two-day meeting on Wednesday and the same was evident from a fresh leg down in the US Treasury bond yields. This, in turn, negated the positive impact from resurgent US dollar demand and did little to lend any support to the USD/CHF pair.
Tuesday's fall to the lowest level since late March adds credence to last week's break below a near two-month-old trading range and might have already set the stage for a further decline. Hence, some follow-through weakness towards retesting March monthly swing lows, around the key 0.9500 psychological mark, now looks a distinct possibility.
Technical levels to watch