- A strong follow-through USD buying helped the pair to gain some traction on Tuesday.
- US-China trade optimism weighed on CHF’s safe-haven demand and remained supportive.
- Some cross-driven weakness kept a lid on any strong follow-through positive momentum.
The USD/CHF pair failed to capitalize on its intraday uptick and has now retreated around 30-pips from the European session swing high level of 0.9852.
A strong follow-through pickup in the US Dollar demand helped the pair to build on the overnight modest bounce from the 0.9800 handle and provided the required momentum to finally break out of a two-day-old consolidative trading range.
Against the backdrop of tempered expectations of an aggressive monetary easing by the Fed, a deal to raise the US government’s borrowing limit triggered a modest uptick in the US Treasury bond yields and underpinned the USD demand on Tuesday.
This coupled with positive trade-related developments – wherein the US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer were said to travel to China for negotiations with Vice Premier Liu He, weighed on the Swiss Franc’s safe-haven status and remained supportive.
Despite the combination of supporting factors, the uptick lacked any strong bullish conviction and fizzled out rather quickly. The pullback, however, lacked any obvious catalyst and could be solely attributed to some cross-driven weakness stemming out of the ongoing slide in the EUR/CHF cross.
Moving ahead, Tuesday’s US economic docket – featuring the second-tier releases of Existing Home Sales data and Richmond Manufacturing Index, will now be looked upon to grab some short-term trading opportunities.
Technical levels to watch
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