- Bulls failed to capitalize on the recent positive move amid reviving safe-haven demand.
- US-China trade optimism/a modest USD uptick helped limit the downside, at least for now.
The USD/CHF pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Wednesday.
The pair struggled to find acceptance above the 0.9900 round-figure mark and for now, seems to have stalled this week’s goodish recovery move from 1-1/2 month lows amid reviving safe-haven demand, which tends to underpin demand for traditional safe-haven currencies – including the Swiss Franc.
Reviving safe-haven demand capping the upside
Risk sentiment took after the UK lawmakers on Tuesday rejected the UK government’s fast-track timetable for passing Brexit legislations. The global flight to safety was reinforced by some follow-through weakness in the US Treasury bond yields, which further collaborated towards capping gains for the pair.
However, optimism over some progress reported in the US-China trade talks, to a larger extent, seemed to have offset the negative factors and helped limit any deeper losses. Adding to this, a modest US Dollar uptick, though lacked any strong bullish conviction, also extended some support to the major.
Firming expectations that the Fed will cut interest rates again at its upcoming monetary policy meeting on October 29-30 might continue to cap any runaway rally for the Greenback. Hence, it will be prudent to wait for a sustained buying interest before confirming that the pair might have bottomed out in the near-term.
Technical levels to watch
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