USD/CHF hangs near 3-month lows, around 0.9800 handle
• The USD struggled to build on/preserve early gains and prompt some selling.
• US-China trade optimism weighs on CHF’s safe-haven demand and helped limit downside.
• Market participants now eye Trump’s address for some meaningful trading opportunities.
The USD/CHF pair struggled to build on its intraday positive move and moved back within striking distance of over three-month lows.
With investors looking past yesterday's weaker US ISM non-manufacturing Index, a follow-through pickup in the US Treasury bond yields helped ease bearish pressure, rather revive the US Dollar demand and turned out to be one of the key factors providing a minor lift to the major.
This coupled improving risk-appetite, as depicted by a positive mood across global equity markets amid the latest optimism over a possible US-China trade deal, dented the Swiss Franc's safe-haven status and further collaborated to the pair's up-move to an intraday high level of 0.9827.
The uptick, however, lacked any strong follow-through and already seems to have lost momentum as investors now seemed convinced that the Fed will opt to slow the pace, or perhaps even pause the tightening cycle in 2019.
Market participants also seemed reluctant to place any aggressive bets and look forward to the US President Donald Trump's address to the nation over the border wall and the government budget impasse for some fresh impetus.
Technical levels to watch
A follow-through selling has the potential to continue dragging the pair further towards testing intermediate support near mid-0.9700s before bears eventually target to challenge the 0.9700 round figure mark. On the flip side, the 0.9825-30 area now seems to have emerged as an immediate resistance, which if cleared might trigger a short-covering bounce towards the very important 200-day SMA, currently near the 0.9880-85 region.