USD/CHF flirts with one-month low, around 0.9500 mark amid weaker USD

• USD/CHF slides to a one-month low on Monday amid the prevalent USD selling bias.
• Diminishing odds for more aggressive Fed rate hikes continue to weigh on the buck.
• A softer risk tone benefits the safe-haven CHF and contributes to the modest downtick.

The USD/CHF pair prolongs its recent downtrend witnessed since mid-June and witnesses selling for the fifth successive day on Monday. This also marks the seventh day of a negative move in the previous eight and drags spot prices to over a one-month low, with bears now awaiting a sustained break below the 0.9500 psychological mark.

The US dollar remains depressed near its lowest level since July 5, which is turning out to be a key factor exerting some downward pressure on the USD/CHF pair. Despite the persistent rise in inflationary pressures, growing recession fears forced investors to scale back expectations for a more aggressive policy tightening by the Fed. This, in turn, has led to a sharp downfall in the US Treasury bond yields and continues to weigh on the greenback.

The USD/CHF pair is further pressured by a generally weaker risk tone, which tends to benefit the safe-haven Swiss franc. The sentiment remains fragile amid worries about an economic downturn. This is evident from a modest weakness in the equity markets. That said, a goodish bounce in the US Treasury bond yields holds back traders from placing aggressive bearish bets around the USD and limits deeper losses for the major, at least for the time being.

Moving forward, market participants now look forward to this week's key US macro releases scheduled at the beginning of a new month for a fresh directional impetus. A rather busy US economic docket kicks off with the release of the ISM Manufacturing PMI later during the early North American session. The market focus, however, would remain on the closely-watched US monthly jobs report - popularly known as NFP on Friday.

Technical levels to watch