- Recovering US bond yields/US-China trade optimism underpinned the USD demand.
- Weaker equities benefited the CHF’s safe-haven status and capped any further gains.
The USD/CHF pair held on to its mildly positive tone through the early North-American session and is currently placed at the top end of its daily trading range, still well below the 0.9900 handle.
The pair stalled its recent sharp pullback from three-month tops and managed to gain some positive traction on Wednesday, snapping four consecutive days of losing streak amid resurgent US Dollar demand. Despite the latest US political drama, wherein the House of Representatives will launch a formal impeachment inquiry against the US President Donald Trump, a goodish pickup in the US Treasury bond yields and encouraging US-China trade development provided a goodish lift to the greenback.
Cautious mood partly offset resurgent USD demand
However, a fresh wave of the global risk-aversion trade, as depicted by a bearish trading sentiment around equity markets, underpinned demand for perceived safe-haven currencies – including the Swiss Franc – and turned out to be one of the key factors capping the upside, at least for the time being.
On the economic data front, the US new-homes sales bettered market expectations and recorded a strong growth of 7.1% in August, rising 713K as compared to the previous month’s upwardly revised reading of 666K, though failed to impress the bulls or provide any additional boost to the major and thus, warrants some cautions before positioning for any further near-term appreciating move.
From a technical perspective, the pair managed to find some support near the lower end of an ascending trend-channel, extending from mid-August swing lows. Any subsequent recovery beyond the 0.9900 handle might trigger a short-covering move and assist the pair to aim back towards retesting the recent swing highs, levels just above the very important 200-day SMA, en-route the parity mark.
Technical levels to watch
Share
