- The CHF benefits from the global flight to safety despite US-China trade optimism.
- Retreating US bond yields prompt some USD weakness and add to the selling bias.
- Investors now look forward to the ECB decision/USD CPI figures for a fresh impetus.
The USD/CHF pair extended its intraday pullback from six-week tops and dropped to fresh session lows in the last hour, with bears now eyeing a follow-through weakness below the 0.9900 handle.
The pair stalled its recent strong positive momentum just ahead of the very important 200-day SMA and witnessed some aggressive long-unwinding trade during the early European session on Thursday.
Reviving safe-haven demand prompt some long-unwinding trade
Despite encouraging trade-related developments, reviving safe-haven demand seemed to be one of the key factors that underpinned the Swiss Franc and exerted some downward pressure on the major.
It is worth mentioning that the US President Donald Trump announced to delay a planned tariff hike on Chinese goods by two weeks as a gesture of goodwill to Beijing's offer to buy more US agricultural products.
The global flight to safety was evident from a sharp intraday pullback in the US Treasury bond yields, which prompted a modest US Dollar pullback from one-week tops and further collaborated to the intraday slide.
It, however, remains to be seen if the latest leg of a sudden fall marks the end of the recent up-move or is still seen as a buying opportunity as investors look forward to the latest US consumer inflation figures for a fresh impetus.
This coupled with the ECB monetary policy decision-led volatility might influence the USD price dynamics and further contribute towards producing some meaningful trading opportunities on Thursday.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.