USD/CHF reverses daily losses en route to 0.9950 ahead of FOMC’s minutes

• USD/CHF erases its intraday losses and rebounds from the 0.9894  swing low as the risk-off is somewhat easing across the board.  
• The next event of relevance for USD/CHF is the FOMC meeting minutes scheduled for 18:00 GMT.  

The Swissy fell about 40 pips in Europe from its Asian range. It then established an intraday floor at 0.9894  in the early European session and erased its losses made earlier. The pair is currently trading at around 0.9941 up 0.13% on Wednesday.  

The US Dollar Index (DXY) which gauge the buck relative to a basket of currencies hit a new multi-week high at 94.12 despite the 10-year Treasury yield benchmark hitting the fourth day of decline and currently trading at around 3.020% at the time of writing.  

Investors will closely watch the FOMC’s minutes for any clues of growth and  inflation in the US. The report is due at 18:00 GMT this Wednesday.  

Meanwhile, CHF was fairly well supported in early European trade for its safe-haven quality as stock indices globally continued their slide down. The risk-off sentiment was prompted by US President Donald Trump’s comments. He said he was not satisfied with trade talks between the US and China. Additionally, on the meeting with the North Korean Leader, Kim Jong Un as it was planned for June 12 in Singapore, he said there is a “substantial chance” that it might not happen. The complex political situation is also playing a negative role in European stock markets.

However, in early American trade, the main US stock indices, the S&P500,  the Dow Jones Industrial Average and the Nasdaq snapped back up at the opening bell lowering CHF safe-haven demand.  

USD/CHF 4-hour chart  

The main trend is bullish while the USD/CHF pulled back to the 0.9900 handle. The market is trading above its 200-period simple moving (SMA) on the 4-hour time-frame while it is trading below its 50 and 100-period SMA. Resistances are priced in at 0.9949 swing low and at the 1.0000 level while supports are seen at the 0.9894 swing low and at the 0.9850 psychological level.