USD/CHF sidelined below 1.0050 level, traders await clarity on US-China trade talks
| • A subdued USD price action fails to provide any meaningful impetus.
• Risk-on mood/US-China trade optimism seemed to help limit losses.
• Focus remains on the upcoming US-China trade talks/FOMC minutes.
The USD/CHF pair failed to capitalize on the early uptick and dropped to fresh session lows in the last hour, albeit quickly recovered few pips thereafter.
A combination of diverging forces failed to provide any meaningful impetus and assist the pair to build on the overnight attempted recovery from one-week lows. A subdued US Dollar price action was seen as one of the key factors keeping a lid on any attempted up-move, though the prevalent risk-on mood, amid US-China trade optimism, helped limit deeper losses, at least for the time being.
Moreover, market participants also seemed to refrain from placing aggressive bets and preferred to wait for fresh headlines from the next round of trade negotiations between the world's two largest economies. Meanwhile, the higher-level talks will start on Thursday, wherein Chinese Vice-Premier Liu He is set to meet US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.
This coupled with the latest FOMC meeting minutes, due for release on Wednesday, will be looked upon for fresh insights over the central bank's near-term monetary policy outlook/rate-hike patch for 2019 and might eventually provide some a fresh directional impetus.
In the meantime, the USD price dynamics and the broader market risk sentiment might continue to act as key determinants of the pair's momentum on Tuesday amid absent relevant market moving economic releases from the US.
Technical levels to watch
The overnight swing lows, around the 1.0025 region, might continue to protect the immediate downside and is closely followed by the parity mark, below which the pair is likely to accelerate the slide further towards the 0.9975-70 support area. On the flip side, the 1.0055-65 region remains a key hurdle, which if cleared decisively should assist the pair to make a fresh attempt towards conquering the key 1.0100 round figure mark.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.