- Trade optimism extended some support to the USD.
- Reviving safe-haven demand might cap strong gains.
The USD/CHF pair climbed to multi-day tops during the early European session on Tuesday, with bulls now eyeing a move beyond the 0.9900 round-figure mark.
The pair added to the overnight modest recovery gains from over one-month lows and continued gaining some follow-through traction for the second consecutive session on Tuesday. Signs of progress over a possible resolution of the prolonged US-China trade disputes extended some support to the US Dollar and turned out to be one of the key factors fueling the ongoing short-covering bounce.
Upside seems limited
Meanwhile, the USD uptick is likely to remain limited amid firming market expectations that the Fed will cut interest rates further in October. This coupled with the prevalent cautious mood, reinforced by an intraday pullback in the US Treasury bond yields, might help revive the Swiss Franc’s perceived safe-haven status and further collaborated towards capping gains for the major.
Hence, it will be prudent to wait for a sustained move beyond the 0.9900 handle before confirming that the recent downfall is over and positioning for any further near-term appreciating move amid absent relevant market moving economic releases from the US.
Technical levels to watch
Share
