- USD/CHF seems to defy risk recovery as markets remain cautious ahead of the key week.
- Trade/Brexit headlines have recently favored risk-on.
- Fed meeting, US jobs report, Brexit events and many more to closely watch on.
Despite the recovery in broad risk sentiment, mainly due to weekend news concerning Brexit/trade, USD/CHF steps back from one week high to 0.9945 during Monday’s Asian session.
A likely three-month Brexit extension and progress of the trade negotiations between the United States (US) and China recently favored the market’s risk tone. As a result, the US 10-year Treasury yields seesaw around 1.80% with Asian stocks mostly being positive by the press time.
However, markets seem to have been worried about the next phase of data/events and the same could have been the reason for the pair’s latest pullback.
The first among them is the Parliamentary voting on the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson’s proposal for an early election. The same is likely to witness pressure despite the opposition Labour Party’s likely support as Liberal Democrats have issues to support the same motion.
Moving on, the US Federal Reserve (Fed) is up for another rate cut on Wednesday but investors are more interested in clues for the future moves while October month US employment data will also be crucial to watch.
Additionally, monetary policy meetings by the Bank of Japan (BOJ) and month-start data flow, not to forget any surprise from the US-China trade front, will also offer a busy week to market players.
Technical Analysis
Unless breaking a monthly trend-line resistance, at 0.9965 now, prices are less likely to aim for 1.0000, which in turn increases the odds for the pair’s another leg down towards 0.9845/35 support-zone including lows marked since late-September.
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