“¢ The USD remained on the defensive amid increasing Fed rate cut bets.
“¢ Fading safe-haven demand weighs on the CHF and lends some support.
“¢ Traders now eye US ADP report and ISM PMI for some fresh impetus.
The USD/CHF pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow band near 2-1/2 month lows.
The pair remained depressed and struggled to register any meaningful recovery amid the prevailing US Dollar selling bias, weighed down by firming market expectations that the Fed will eventually cut rates in the face of escalating US-China trade tensions.
A day after St. Louis Fed President James Bullard said that a rate cut may be needed soon, the Fed Chair Jerome Powell on Tuesday refrained from repeating the central bank’s patient stance rather hinted at the possibility of an interest rate cut in the wake of gloomy economic growth outlook.
Meanwhile, the negative factor, to a larger extent, was negated by improving risk sentiment, which tends to dent the Swiss Franc’s safe-haven status and collaborated to the pair’s subdued/range-bound price action through the early European session on Wednesday.
The pair, for now, has managed to hold its neck above the 0.9900 round figure mark as market participants now look forward to the US economic docket – featuring the release of ADP report and ISM non-manufacturing PMI, for some meaningful trading opportunities.
Technical levels to watch
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