- USD / CHF was observed to be hovering in a range close to the one-week lows touched earlier this Tuesday.
- The risk appetite momentum undermined the safe haven CHF and extended some support to the pair.
- Relief from downside fears continued to weigh on the USD and limited the upside for the pair.
The pair USD/CHF it balanced between tepid gains / minor losses during the first half of the European session and was last seen trading in neutral territory, around the 0.9125-30 zone.
A combination of divergent forces failed to provide significant boost to the USD / CHF pair, but instead led to moderate / in-range price action near the week-long lows touched earlier this Tuesday. The risk appetite boost undermined the safe-haven Swiss franc and extended some support to the pair. That said, the prevailing selling bias of the US dollar acted as a headwind for the pair.
Global risk sentiment soared after the US Food and Drug Administration (FDA) gave full approval to the Pfizer / BioNTech COVID-19 vaccine. This, to a greater extent, offset concerns about the economic fallout of the fast-spreading Delta variant of the coronavirus and was evident in a generally positive tone around global equity futures.
Meanwhile, the continued emergence of new COVID-19 cases could have pushed back expectations about the likely timing of the Fed’s phase-down plan. Investors now appear to be convinced that the Fed will wait a longer period before making any movement. This was seen as a key factor contributing to the continued retracement of the USD from multi-month lows.
However, a good recovery in US Treasury yields helped limit the deeper losses for the dollar. Aside from this, investors also seemed reluctant to make aggressive bets ahead of Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium. This, in turn, warrants some caution before positioning for any further depreciation movements for the USD / CHF pair.
Market participants are now looking forward to the US economic agenda, which features second-tier data from New Home Sales and the Richmond Manufacturing Index. The data can do little to provide significant momentum, although the broader market risk sentiment could still produce some short-term trading opportunities around the USD / CHF pair.
Technical levels
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