- A sudden turnaround in risk sentiment underpinned the CHF’s safe-haven demand.
- Slumping US bond yields weighed on the USD and collaborated to the intraday slide.
The USD/CHF pair failed to capitalize on its early uptick and quickly retreated over 50-pips, sliding below mid-0.9700s to refresh session lows in the last hour.
The pair stalled its attempted recovery from six-week lows – set in the previous session, and faced rejection near the 0.9800 handle amid the global flight to safety. Against the backdrop of the recent escalation in the US-China trade tensions, increasing pessimism about the outlook for the world economy was seen benefitting the Swiss Franc’s perceived safe-haven status.
Deteriorating global risk sentiment was evident from a sharp intraday turnaround in equity markets and reinforced by the ongoing slump in the US Treasury bond yields, which exerted some downward pressure on the US Dollar and further collaborated to the intraday downfall, erasing the previous session’s modest recovery gains.
It will now be interesting to see if the pair is able to attract any buying interest at lower levels or the current pullback marks the resumption of the prior well-established bearish trend amid absent relevant market moving economic releases from the US and ahead of a scheduled speech by Chicago Fed President Charles Evans.
Technical levels to watch
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