- USD/CHF pulls back from 1-week highs and reverses much of the previous day’s gains.
- The less aggressive Fed stance and lower US bond yields weigh on the USD and put pressure on the pair.
- Risk appetite does not help weaken the safe-haven CHF or support the pair.
The pair USD/CHF fails to capitalize on its modest intraday gains and attracts new sellers near the 0.9220-0.9225 zone, in one-week highs reached earlier this Wednesday. The pair falls to the area of ​​0.9165 during the first half of the European session and has already reversed much of the previous day’s gains.
against the background of the less aggressive stance of the Federal Reserve (Fed), a further drop in US Treasury yields weighs on the US dollar (USD) and puts some downward pressure on the USD/CHF pair. It should be remembered that last week the Central Bank of the USA. softened its approach to curbing inflation and signaled that a pause in interest rate hikes was on the horizon following the recent turmoil in the banking sector. This, in turn, keeps USD bulls on the back foot and continues to act as a headwind for the USD/CHF pair.
Even the risk appetite prevailing in the stock markets, with a positive tone, does not weigh on the safe-haven Swiss franc (CHF), nor does it support the USD/CHF pair. This, in turn, suggests that the path of least resistance for the pair is to the downside and any recovery attempt is more likely to be sold. That being said, the price swing over the past week points to indecision about the pair’s next directional move and warrants some caution for aggressive traders.
Market participants are now watching the Swiss National Bank (SNB) Quarterly Bulletin for new clues on the national economy, especially after the recent events surrounding the Credit Suisse saga. Meanwhile, Pending Home Sales data will be released on the US economic calendar which, together with US bond yields, could influence the dollar and give USD/CHF some momentum. However, market attention will remain focused on the US core PCE price index, the Fed’s preferred inflation gauge, due for release on Friday.
USD/CHF technical levels to watch
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
