“¢ Investors looked past the US decision to raise tariffs on Chinese goods.
“¢ Fading safe-haven demand undermines CHF and seemed to lend support.
“¢ A subdued USD action does little to influence ahead of the latest US CPI.
The USD/CHF pair held on the defensive mode through the mid-European session on Friday, albeit has managed to hold its neck just above three-week lows set in the previous session.
After repeated failures to sustained/build on the momentum beyond the 1.0200 handle, the pair witnessed some aggressive long-unwinding trade on Thursday and was being weighed down by the global flight to safety.
The increase in the US tariffs on $200 billion worth of Chinese goods and China’s threat to retaliate benefitted the Swiss Franc’s relative safe-haven status, which turned out to be one of the key factors weighing heavily on the major.
However, the fact that China’s Vice Premier Liu He will remain in Washington for the second day of trade talks was seen as an indication that both sides are still determined to reach a deal and now seemed to extend some support.
This coupled with a slight improvement in the global risk sentiment, evident from a goodish rebound in the European equity markets, further collaborated towards limiting any meaningful downfall for the major.
Meanwhile, a subdued US Dollar price action did little to influence the price action, with the broader market risk sentiment turning out to be an exclusive driver of the pair’s range-bound price action on the last trading day of the week.
It would now be interesting to see if the pair continues finding some support at lower levels as market participants now look forward to Friday’s important release of the latest US consumer inflation figures for fresh impetus.
Technical levels to watch
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