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  • USD/CHF regained positive traction on Wednesday amid a strong pickup in the USD demand.
  • Weaker risk sentiment might underpin the safe-haven CHF and cap the upside for the major.
  • Investors now eye US Durable Goods Orders for some impetus ahead of the FOMC decision.

The intraday USD buying picked up pace during the early European session and pushed the USD/CHF pair to fresh daily tops, closer to the 0.8900 mark in the last hour.

Following the previous day’s rejection slide from the mentioned handle, the pair managed to regain positive traction on Wednesday and was supported by resurgent US dollar demand. Investors turned cautious amid doubts about the size and timing of a new US fiscal stimulus package, which, in turn, provided a modest lift to the greenback.

The USD uptick could further be attributed to some repositioning trade ahead of the latest FOMC monetary policy decision, due later this Wednesday. That said, the prevalent cautious mood around the equity markets could extend some support to the safe-haven Swiss franc and keep a lid on any meaningful upside for the USD/CHF pair.

Fading hopes for rapid approval of the long-awaited US economic stimulus plan comes amid growing market worries about the potential economic fallout from the continuous surge in coronavirus cases. This, along with escalating US-China tensions in the South China Sea, further weighed on investors’ sentiment and dampened the market mood.

Even from a technical perspective, the USD/CHF pair has been struggling to find acceptance or capitalize on its move beyond the 0.8900 round-figure mark. This warrants some caution for bullish traders and makes it prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move.

Heading into the key event risk, the release of the US Durable Goods Orders data might influence the USD price dynamics and provide some impetus. Apart from this, the broader market risk sentiment and developments surrounding the coronavirus saga might further assist traders to grab some short-term opportunities.

Technical levels to watch