USD/CHF off multi-year lows, still in the red below 0.9200 mark

• USD/CHF continued losing ground on Monday amid some heavy selling around the USD.
• Concerns about rising COVID-19 cases, worsening US-China relations weighed the buck.
• The upbeat market mood undermined the safe-haven CHF and helped limit further losses.

The USD/CHF pair now seems to have entered a bearish consolidation phase and was seen oscillating in a range near multi-year lows, below the 0.9200 mark.

The pair prolonged its recent bearish trend witnessed over the past one week or so and remained under some follow-through selling pressure for the fifth consecutive session on Monday. The prevalent heavily offered tone surrounding the US dollar was seen as one of the key factors that dragged the pair to its lowest January 2015.

The recent escalation in diplomatic tensions between the US and China added to market concerns that the economic recovery in the US could be grinding to a halt amid the resurgence in coronavirus cases. This, in turn, fueled speculations that the Fed would add more stimulus for a longer period of time and in bigger quantities.

This was evident from the ongoing slide in the US Treasury bond yields, which further weighed the USD and kept exerting downward pressure on the USD/CHF pair. However, a positive mood around the equity market and the recent optimism over a potential COVID-19 vaccine undermined the safe-haven Swiss franc and helped limit further losses.

Apart from this, extremely oversold conditions on short-term charts extended some support, rather assisted the USD/CHF pair to rebound around 20 pips from the 0.9165 region. That said, any meaningful recovery attempt might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders later during the early North American session. The data might influence the USD price dynamics, which along with the broader market risk sentiment will be looked upon for some meaningful trading opportunities.

Technical levels to watch