- USD/CHF reversed an early dip to 0.9645 level and turned higher for the second straight day.
- The uptick was sponsored by a sudden pickup in the USD demand and upbeat market mood.
- The pair struggled to find acceptance above 0.9700 mark, warranting some caution for bulls.
The USD/CHF pair rallied around 75 pips during the early European session and shot to fresh session tops, around the 0.9720 region in the last hour.
A sudden pickup in the US dollar demand assisted the pair to quickly reverse an early dip to the 0.9645 region and turn positive for the second consecutive session on Tuesday.
Following a brief consolidation through the early part of Tuesday’s trading action, the greenback managed to regain traction amid some aggressive selling around the shared currency.
This comes on the back of improving risk sentiment, as depicted by a positive mood around the equity markets, which undermined the Swiss franc’s safe-haven demand and remained supportive.
Despite a US-China spat over the origin of the virus, investors turned optimism in the wake of a move by governments in some parts of the world to ease coronavirus-induced lockdowns.
Meanwhile, the intraday positive momentum lacked any strong follow-through and started losing steam as investors preferred to wait for a fresh catalyst before placing fresh directional bets.
Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have already bottomed out and positioning for any further appreciating move.
Moving ahead, market participants now look forward to the release of ISM Non-Manufacturing PMI, which might influence the USD price dynamics and produce some short-term trading opportunities.
Technical levels to watch
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