USD/CHF set to close below parity  amid USD correction

• The bull trend might be at risk if  USD bulls do not print a leg higher soon.
• The FOMC’s minutes on Wednesday can seal the near future of the Swissy.

The USD/CHF pair is trading at around 0.9975  virtually unchanged on Monday.

The Swissy rose to parity against the greenback in Asia, although the level acted as a strong resistance during most of the European session. A couple of hours before the London close the pair was driven down to the 0.9970 level and is currently consolidating in the 0.9975  region.  

The US and China are on the path of reconciliation over the trade war as it was announced over the weekend. US Treasury Secretary Mnuchin, commented: “we are putting the trade war on hold. Right now, we have agreed to put the tariffs on hold while we try to execute the framework.” Additionally, he made a comment on the US currency: ” ‘in the long-term, a strong U.S. dollar is good for the United States.” The US Dollar Index (DXY) reached a new multi-year high at 94.06 and has now retraced all its daily gains as it is in the 93.60 region.

The main European stock indices rose at the open, which was not favorable for CHF as it is considered a safe-haven currency. However, most indices have given back their gains at the time of writing.  

In the second part of the American session, Fed’s Patrick T. Harker (non-voter and hawkish) made some dovish comments keeping USD on the back foot. He said that is doesn’t see a fast acceleration of inflation.

Looking further, the main event for USD will be the FOMC’s minutes on Wednesday at 18:00 GMT, which is likely to set the newt directional move in the most USD-related pair.

USD/CHF daily chart  

The trend is bullish, however, the bears are trying hard to create a reversal. Resistance is seen at the 1.0059 high of 2018 followed by 1.0100 and 1.0200 psychological figures. On the other hand, the bears should expect support at 0.9957 swing low and then at the 0.9900 figure. The Swissy is trading above its 50, 100 and 200-period simple moving averages on the daily chart suggesting a strong upward momentum, however, considering the double top and the extended move on USD investors should be careful.