USD/CHF slides to fresh 1-month low, around mid-0.9800s
|- USD/CHF added to the overnight losses and continued losing ground on Tuesday.
- Persistent trade uncertainty was seen underpinning the CHF’s safe-haven demand.
- The set-up favours bearish traders, albeit warrants some caution ahead of FOMC.
The USD/CHF pair remained heavily offered for the second consecutive session on Tuesday dropped to fresh one-month lows, around mid-0.9800s in the last hour.
Having failed to capitalize on the post-NFP positive move, the pair met with some fresh supply on the first day of a new trading week and continued losing ground through the mid-European session on Tuesday.
Reviving safe-haven demand benefitted the CHF
Uncertainties about a potential phase one trade deal between the world's two largest economies led to a fresh wave of the global risk-aversion trade and benefitted the Swiss franc's perceived safe-haven status.
The global flight to safety was evident from weaker sentiment around equity markets and reinforced by a fall in the US Treasury bond yields, which undermined the US dollar demand and further collaborated to the pair's slide.
This coupled with possibilities of some short-term trading stops being triggered below the recent daily close support near the 0.9870 horizontal zone further aggravated the bearish pressure surrounding the major.
Hence, some follow-through weakness, back towards challenging the 0.9800 round-figure mark, now looks a distinct possibility amid absent relevant market-moving economic releases from the US.
Having said that, some repositioning trade ahead of this week's key event risk – the latest FOMC monetary policy update on Wednesday, might lend some support and help limit deeper losses, at least for the time being.
Technical levels to watch
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