- The risk-on mood continues to undermine the CHF’s safe-haven demand.
- The USD remains supported by the ongoing rally in the US bond yields.
- Traders now look forward to the US PPI print for some short-term impetus.
The USD/CHF pair quickly reversed an intraday dip to sub-0.9900 level and spiked to two-day tops in the last hour, albeit lacked any strong follow-through.
After consolidating in a range through the early part of Tuesday’s trading action, a combination of supporting factors helped the pair to regain positive traction for the second consecutive session on Tuesday.
The US Dollar, though struggled to gain any meaningful traction, remained supported by a follow-through rally in the US Treasury bond yields and was seen as one of the key factors behind the positive move.
Adding to this, the prevailing risk-on mood, as depicted by a bullish trading sentiment around global equity markets, further dented the Swiss Franc’s relative safe-haven status and provided an additional boost.
However, lingering concerns about a further escalation in trade tensions between the world’s two largest economies, coupled with increasing bets for a Fed rate cut in 2019 kept a lid on any runaway rally for the major.
Hence, it would be prudent to wait for a strong buying interest before confirming that the pair might have actually bottomed out in the near-term and positioning for any further near-term appreciating move.
Moving ahead, Tuesday’s US economic docket – highlighting the release of Producer Price Index (PPI) for May, will now be looked upon for some short-term trading impetus later during the early North-American session.
Technical levels to watch
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