USDCHF Falls Amidst Bearish Fed Comments

<h2>Fed’s Daly Warns of “Bumpier” Recovery</h2>
<p>Comments from some members of the Fed this week have stoked expectations of further easing from the US central bank as it continues to battle the negative economic impact of COVID-19. San Francisco Fed president Mary Daly warned on Tuesday that the loss of employment in areas such as travel, tourism, and hospitality will not be easily replaced, adding that, while the rebound in employment over the last two months was encouraging, many industries have had to change now meaning that return to full employment looks unlikely.</p>
<p>During a virtual chat hosted by the National Association of Business economists, Daly said: “We don’t know how long it will fully take to put the virus behind us. I am assuming [unemployment] will level off at someplace we don’t want to be.”</p>
<h2>Fed’s Barkin Suggests Fed Will Ease Further</h2>
<p>These comments were echoed by Richmond Fed president Thomas Barkin who lamented the situation saying: “I don’t believe my favourite restaurant will be back to full staff. I don’t think my favourite retailer will be back to full staff.” When questioned whether the Fed would need to do more to help boost the economy, Barkin was unequivocal in his answer, saying: “unemployment is 11% so yes”.</p>
<p>Over recent weeks the fresh uptick in new infections rates across the US has been watched with caution by markets and the central bank alike. With the reintroduction of lockdown measures in some areas and the potential for further such measures to be reintroduced, there are now concerns over the pace of the recovery and the outlook for the economy.</p>
<p>Atlanta Fed president Raphael Bostic told reporters this week: “There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise.”</p>
<h2>Fears Over Rising Virus Numbers</h2>
<p>It is worth noting, however, that while the infection numbers have been rising in as many as 40 states, the death toll has been decreasing. Many experts point to this phenomenon as being a function of the fact that testing has been dramatically increased though also, worryingly, that many younger people are being infected by the virus. While younger people typically display a much lower mortality rate, there are fears regarding how quickly the spread of the virus could increase if infection rates in young people rise, especially those who are asymptomatic.</p>
<p>Risk markets are showing resilience for now. While initial reports of a fresh uptick in virus cases fuelled some selling over the last fortnight, news that the death toll is falling has helped assuage concerns, keeping risk sentiment supported.</p>
<h2>Technical Views</h2>
<p><strong>USDCHF (Bearish below .9465)</strong></p>
<p>From a technical viewpoint. The decline in USDCHF has seen price breaking back below the yearly S1 ( .9465) as the bearish channel continues to develop. While price holds below here, and with VWAP negative, the near-term bias remains bearish with the .9192 2020 lows the main downside target to note.</p>
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