- USD/CHF edged lower amid the emergence of some fresh USD selling pressure.
- The risk-on mood undermined the safe-haven CHF and helped limit the downside.
- The pair is yet to confirm a bearish breakthrough a two-month-old trading range.
The USD/CHF pair quickly recovered around 50 pips after hitting fresh two-month lows and jumped to fresh session tops, around the 0.9620 region in the last hour.
Following a brief consolidation through the early part of Tuesday's trading action, the pair edged lower during the early European session. The downfall was sponsored by the emergence of some fresh US dollar selling, albeit the upbeat market mood helped limit deeper losses.
The USD remained depressed on the back of growing optimism over a sharp V-sharp recovery for the global economy. This coupled with the widespread protests in dozens of American cities over the death of George Floyd further undermined the sentiment surrounding the greenback.
Meanwhile, the downside remained cushioned, at least for the time being, amid the prevalent risk-on environment, which dented the Swiss franc's safe-haven status. Hence, it will be prudent to wait for some follow-through selling before positioning for any further depreciating move.
Even from a technical perspective, the pair has been showing some resilience below the 0.9600 round-figure mark, which coincides with the lower end of a two-month-old trading range. A convincing breakthrough will set the stage for a fall towards the key 0.9500 psychological mark.
In the absence of any major market-moving economic releases on Tuesday, the broader market risk sentiment might continue to play a key role in influencing the USD/CHF pair. This coupled with the USD price dynamics might contribute to produce some short-term trading opportunities.
Short-term technical outlook