USD/CHF decline extends to levels near long term lows at 0.8998

• USD/CHF pulls back from 0.9160 and dives to 0.9030.
• The dollar is approaching five-year lows at 0.8998.
• Below 0.9048, next key support levels are 0.8998 and 08943 –  Commerzbank.

US dollar recovery attempt from Tuesday’s lows at 0.9085 has been capped at 0.9160 area and the pair resumed its downtrend on Wednesday, returning below 0.9100 to hit session lows at 0.9030,  approaching dangerously five-year lows at 0.8998.

US dollar dives on hopes of a US stimulus deal 

The greenback plunged across the board on Wednesday as hopes of a breakthrough on the US coronavirus stimulus negotiations boosted demand for risky assets. The US Dollar Index has declined for the fourth consecutive day to hit seven-week lows.

Investors’ optimism was triggered by the US Home Secretary, Nancy Pelosi who showed optimism about the chances of reaching a deal before the Elections Day. Today, US President Trump said that he is willing to accept a large aid package, suggesting that he will pass the $2.2 trillion bill pushed by the Democrats against the opposition within his own party.

USD/CHF: Important support at 0.8998 and 0.8943 – Commerzbank

On the technical front, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank points out to 0.8998 and 0.8943 as key support levels for the USD: “Attention on the 0.9048 mid-September low. Only a slide below 0.9048 will target the 0.8998 recent low. The recent low at 0.8998 guards 0.8943 (TD support). Failure at 0.8943 is needed to introduce scope to the 0.8703/0.8698 2014 lows.” 

Technical levels to watch