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  • USD/CHF pulls back from fresh 10.5 month low amid a recovery in risk sentiment.
  • Absence of escalation in Hong Kong protests, likely US-China trade talks in September triggered the latest risk-on.

With the recent pullback in risk sentiment, USD/CHF recovers from the September 2018 low while trading near 0.9717 during early Tuesday.

Resuming flight operation at Hong Kong airport and one more diplomat from the Trump Administration, National Security Adviser John Bolton, highlighting chances of September trade negotiations between the US and China triggered fresh risk-on during the Asian session. Further improving the tone was upbeat business survey data from the National Bank of Australia (NBA) and hawkish comments from South Korean President.

Portraying the moves are the US bond yields that previously slumped. The US 10-year treasury yield rises to 1.650% whereas that of 30-year note also improving to 2.14% from the record low.

The quote earlier slumped to the multi-month low as Hong Kong protesters forced the national airport to close while victory anti-market candidate during Argentina’s primary Presidential election also favored safe-havens like the Swiss Franc (CHF).

In addition to following trade/political news, the US Consumer Price Index (CPI) data will also be the key for near-term price direction. The headline inflation figure is likely to improve but the core reading excluding food and energy might disappoint on a monthly basis.

Technical Analysis

Should prices fail to cross 0.9798/0.9803 area including Wednesday’s high and late-July low, 0.9650 and 0.9600 can flash on bears’ radar while 0.9840 and 0.9860 can please buyers on the upside break.