USD/CHF slides farther below mid-0.9900s, fresh session low

• Weaker risk sentiment benefitted the CHF’s safe-haven status and exerts some pressure.
• The USD gains traction amid recovering US bond yields and helped limit further losses.

The USD/CHF pair failed to capitalize on the attempted intraday bounce and is currently placed at the lower end of its daily trading range, just below mid-0.9900s.
 
The pair extended last week’s pullback from multi-month tops and remained depressed for the second consecutive session on Monday, though a modest US Dollar uptick helped limit any meaningful downside, at least for the time being. As investors looked past Friday’s mixed US monthly jobs report, a goodish pickup in the US Treasury bond yields underpinned the USD demand and turned out to be one of the key factors lending some support to the major.

Weighted down by renewed trade pessimism

However, a slight deterioration in the global risk sentiment, as depicted by a slightly negative mood around equity markets, benefitted traditional safe-haven currencies, like the Swiss Franc and exerted some intraday downward pressure. The not so positive trade-related headlines, wherein Chinese officials were reported to be reluctant to agree to a broad trade deal pursued by the US President Donald Trump dented investors’ appetite for perceived riskier assets.
 
Despite the pullback, the pair remained well within its recent trading range held over the past one week or so and warrant some caution for bearish traders. Hence, it will be prudent to wait for a strong follow-through selling before confirming that the pair might have actually topped out in the near-term and positioning for any further near-term depreciating move.
 
In absence of any major market-moving economic releases from the US, Monday’s key focus will be on the Fed Chair Jerome Powell’s scheduled speech later during the US trading session. Powell’s comments will be closely scrutinized for clues about the central bank’s policy outlook and provide some meaningful impetus ahead of the upcoming FOMC meeting on October 29-30.

Technical levels to watch