- USD/CHF witnessed some follow-through selling for the seventh straight session on Wednesday.
- The prevalent selling bias around the USD was seen as a key factor behind the ongoing downfall.
- Repositioning trade ahead of the highly anticipated FOMC decision might infuse some volatility.
The USD/CHF pair dropped to fresh multi-year lows during the early European session, albeit quickly recovered few pips thereafter and was last seen trading near mid-0.9100s.
The pair prolonged its recent bearish trajectory and continued losing ground for the seventh consecutive session on Wednesday, also marking the eighth day of a negative move in the previous nine. The downfall was exclusively sponsored by the emergence of some fresh selling around the US dollar.
The greenback remained depressed and languished near two-year lows through the first half of the trading action on Wednesday. The impasse over the next round of US fiscal stimulus measures and expectations of a dovish shift in the Fed's policy stance contributed to the USD's offered tone.
Worries that the US economic recovery could be grinding to a halt in the wake of the resurgence in coronavirus cases have been fueling speculations that the Fed will add more stimulus to support the economy. The FOMC is scheduled to announce its policy decision during the US session on Wednesday.
The US central bank is widely expected to keep its policy measures unchanged at the end of a two-day meeting on Wednesday and hence, the key focus will be on the accompanying rate statement. The forward guidance will help investors determine the next leg of a directional move for the buck.
Meanwhile, a modest bounce in the US Treasury bond yields might extend some support to the greenback. This coupled with some repositioning trade ahead of Wednesday's key event risk might trigger some short-covering bounce and infuse some volatility around the USD/CHF pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.