USD/CHF encounters a pause on the way down
The pair ran into key daily support from the 0.9200 level as well as the February 2018 low @ 0.9188 and that helped to limit the losses overnight.
As the market mood improved to start the day, the pair rose higher towards 0.9375 but has seen gains fade towards the 0.9300 level to start the European morning.
Despite risk keeping steadier footing after the meltdown yesterday, optimism remains fleeting. The virus outbreak continues to keep the market on shaky ground and there is little indication that we are just about to turn the corner any time soon.
European equities looked set to post gains of nearly 2% in early trades but that optimism has washed out with gains of around 1% or less seen across the board. That is hardly worth anything compared to the sizable losses sustained in trading yesterday.
As for USD/CHF, the slight retracement so far is still suggestive of a bit of a breather after the wild day in the market yesterday. For sellers, breaching below the 0.9200 level and support at 0.9188 will be key in the days ahead.
For buyers, they need to try and keep a break above 0.9400 to gather back any form of confidence. The 100-hour moving average rests at 0.9409 so that will be the key first step in regaining near-term momentum.
Otherwise, the latest price action here will prove to be nothing more than just a pause before the downturn resumes amid fears surrounding the global economy.
