USD/CHF surrenders early recovery gains, back near 0.9700 mark ahead of FOMC minutes
- USD/CHF struggled to preserve the intraday recovery gains to the 0.9745 region.
- A modest USD pullback from highs prompted some fresh selling at higher levels.
- The downside seems limited as investors now look forward to the FOMC minutes.
The USD/CHF pair retreated back to the lower end of its daily trading range, with bears now looking for some follow-through weakness below the 0.9700 mark.
The pair failed to capitalize on its early attempted recovery, instead faced rejection near 100-day SMA barrier, around the 0.9745 region amid some US dollar selling at higher levels.
Fresh hopes that the coronavirus pandemic may be reaching its peak, despite a further increase in the daily death toll, turned out to be one of the key factors exerting some pressure on the buck.
The latest optimism was evident from a strong opening in the US equity markets, which undermined the Swiss franc's safe-haven demand and helped limit deeper losses, at least for the time being.
However, persistent uncertainty over the economic fallout from the pandemic might lend some support to the USD's status as the global reserve currency and warrant some caution for bearish traders.
Hence, it will be prudent to wait for some strong follow-through selling, possibly below the overnight swing low near the 0.9685 region, before positioning for a further depreciating move.
Moving ahead, Wednesday's release of the FOMC monetary policy meeting might influence the USD price dynamics and contribute towards producing some meaningful trading opportunities.
Technical levels to watch