USD/CHF trims a part of early strong gains, holds steady above mid-0.9100s

• USD/CHF rallied to the 0.9200 neighbourhood amid resurgent USD demand.
• A tight race to the White House drove investors back towards the greenback.
• The delay in the final result benefitted the safe-haven CHF and capped gains.

The USD/CHF pair had some good two-way price swings during the Asian session on Wednesday and now seems to have stabilised above mid-0.9100s.

Following the previous day's pullback and an early dip to sub-0.9100 levels, the pair caught some aggressive bids and shot to the 0.9200 neighbourhood amid a strong pickup in the US dollar demand. Early results of the US election indicated a tighter than expected race, which, in turn, forced investors to hedge their positions and drove some aggressive flows towards the greenback.

In fact, betting markets indicate that the incumbent President Donald Trump is now the favourite to win a second term. However, the fact that there will be a delay in results from key battleground states – Wisconsin, Michigan and Pennsylvania – fueled uncertainty and weighed on investors' sentiment, which benefitted the safe-haven Swiss franc and capped the upside for the USD/CHF pair.

The combination of factors held investors from placing aggressive directional bets and led to a modest intraday pullback of around 35 pips. Nevertheless, the USD/CHF pair, so far, has managed to hold with modest daily gains as the market focus remains firmly glued to the political developments in the world's largest economy.

Technical levels to watch