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  • Latest trade/political headlines trigger USD/CHF pullback from 50-day SMA.
  • The quote earlier struggled between SNB’s pledges on FX intervention/negative rates and markets’ indecision.

USD/CHF registers another U-turn from the 50-day simple moving average (SMA) as it declines to 0.9805 before the European session begins on Thursday.

Comments from the Swiss National Bank’s (SNB) Andréa M Maechler, Member of the Governing Board,  favored the buyers on Wednesday as they signaled the central bank’s readiness for FX intervention, negative rates.

However, worsening risk tone while concerning the US-China trade, mixed statements from the Fed lawmakers and the Trump Administration dragged the USD/CHF again to the south. Also weighing on the risk sentiment is a strong presence of Chinese military in Hong Kong and geopolitical tension between the US and China at the South China Sea.

While portraying the mood, the US 10-year treasury yield dropped to 1.454%, which in turn highlighted the risk of the US recession as its two-year counterpart remained above to 1.496% by the press time.

Even if major market attention is likely to be given to trade/political headlines, the US Gross Domestic Product (GDP) figures will also be watched for near-term direction.

Technical Analysis

The USD/CHF pair needs to provide a daily closing beyond 50-day SMA level of 0.9825 in order to aim for monthly top surrounding 0.9880, failing to do so will keep fetching the quote towards 0.9770 and a two-week-old rising support-line close to 0.9830.