USD/CHF in search of a firm direction, consolidates in a range above 200-day SMA

   “¢   Dovish Fed expectations/resurfacing US-China trade tensions failed to provide fresh impetus.
   “¢   A larger than expected fall in Swiss trade surplus weigh on CHF and provides a minor lift.
   “¢   US consumer confidence eyed for some trading opportunities ahead of the key event risks.

The USD/CHF pair extended its sideways consolidative price action and oscillated in a narrow trading band, just above over one-week lows set in the previous session.

The pair stalled last week’s rejection slide from the key 1.0000 psychological mark and managed to find decent support near the very important 200-day SMA on Tuesday, albeit a combination of negative factors failed to provide any meaningful impetus.

Yet unresolved US-China trade disputes seemed to escalate further after the US Justice Department charged China’s Huawei Technologies with fraud and obstruction. The latest development might complicate the upcoming high-level US-China trade talks and eventually extended some support to the Swiss Franc’s relative safe-haven status.

This coupled with a subdued US Dollar price action, which remained on the back-foot amid dovish Fed expectations, further collaborated towards capping and led to a subdued/range-bound price action through the early European trading session on Tuesday.

On the economic data front, the disappointing release of Swiss trade balance data, coming in to show a larger than expected drop in the surplus to CHF 1.879 billion in Nov. as against CHF 4.745 billion previous, helped offset the negative forces and extended some support, at least for the time being.

Moving ahead, today’s release of the Conference Board’s US consumer confidence index will be looked upon for some short-term trading opportunities. The key focus, however, will be on the latest FOMC monetary policy update, which coupled with some fresh trade-related news should influence the near-term sentiment surrounding the major.

Technical levels to watch