USD/CHF sits near 2-month tops, just below mid-0.9800s

• USD/CAD was seen consolidating its recent strong gains to two-month tops.
• A subdued USD price action fails to impress bulls or provide a fresh impetus.

The USD/CHF pair seesawed between tepid gains/minor losses on Wednesday and consolidated its recent gains to two-month tops, set in the previous session.

The pair added to its recent strong gains and gained some follow-through traction on Tuesday amid sustained US dollar buying interest. The already stronger greenback got an additional boost following the release of stronger-than-expected Empire State Manufacturing Index.

The downside remains cushioned

The USD bulls took some breather on Wednesday, shrugging off a modest uptick in the US Treasury bond yields, and turned out to be one of the key factors keeping a lid on any further gains. The downside, however, remained cushioned amid a recovery in the global risk sentiment.

Despite mounting concerns over deepening economic fallout from the coronavirus outbreak in China, the fact that the number of new cases infected by the deadly virus has been declining over the past few days supported investors' appetite for perceived riskier assets.

Against the backdrop of positive factors, the subdued/range-bound price action might still be categorized as a bullish consolidation, especially after the pair's recent strong positive move of around 200 pips since the beginning of this February.

Hence, any meaningful pullback might still attract some dip-buying and help limit any deeper losses. Moving ahead, market participants now look forward to the US economic docket, which coupled with speeches by influential FOMC members might provide some fresh impetus.

Technical levels to watch