- A goodish pickup in the USD demand helped gain some follow-through traction.
- The positive momentum seemed unaffected by the prevalent risk-off mood.
- Wednesday’s key focus will remain on the release of the latest FOMC minutes.
The USD/CHF pair built on its goodish intraday positive move and climbed to one-week tops, around the 0.9930 region in the last hour.
The pair added to the previous session’s modest uptick and gained some follow-through traction through the mid-European session on Wednesday. The positive momentum seemed unaffected by the prevalent risk-off mood, led by persistent US-China trade uncertainty and which tends to benefit the Swiss franc’s perceived safe-haven status.
Bulls shrug off trade uncertainty, risk-off mood
In the latest development, US President Donald Trump on Tuesday threatened to raise new tariffs on Chinese imports if the ongoing trade negotiation fails. Adding to this, the US Senate unanimously passed a bill aimed at protecting human rights in Hong Kong, which was further seen fueling tension between the world’s two largest economies.
The global flight to safety was further reinforced by a sharp fall in the US Treasury bond yields, now down anywhere between 2.0-2.5% for the day. Bulls, however, took cues from a goodish pickup in the US dollar demand, which seemed to be the only factor driving the pair higher for the fourth consecutive session on Wednesday.
It will now be interesting to see if the pair is able to capitalize on the momentum or meets with some supply at higher levels as investors start repositioning for Wednesday’s key event risk. The latest FOMC meeting minutes, due for release later during the US trading session, will grab the spotlight on Wednesday and provide a fresh directional impetus.
Technical levels to watch
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