USD/CHF retreats below 0.9500 as the dollar loses strength
- USD/CHF recovery from 0.9460 has been capped at 0.9522.
- The dollar loses ground as market sentiment improves with equities resuming their bullish trend.
- The pair is going through a correction higher ahead of further losses – Commerzbank.
US dollar's rebound from session lows at 0.9460 has been capped at 0.9520 and the pair retreated below 0.9500 as market sentiment improved with equity markets resuming their upward trend.
The dollar loses steam as market sentiment improves
The greenback bounced up across the board earlier during the US session on reports pointing out to an increase of COVID-19 cases in several US states and a new outbreak in Beijing that has forced local authorities to restrict travel.
Furthermore, the negative tone of US Federal Reserve chairman, Jerome Powell’s comments regarding the post-coronavirus recovery increased risk aversion, boosting the safe-haven dollar against its main rivals.
The pair however has been capped below recent highs, with the USD trimming gains as the market digests the news and equity markets resume their initial bullish trend, supported by upbeat US retail sales and industrial production figures.
USD/CHF: correction higher ahead of further losses – Commerzbank
Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank sees the USD upside move as a corrective reaction ahead of further decline, “USD/CHF charted a hammer reversal on Thursday and is seeing a correction higher ahead of further losses. Rallies from here will see initial resistance 0.9580, 0.9650, but the market will remain directly offered while capped by the short-term downtrend at 0.9697.”
USD/CHF key levels to watch