- Bulls fail to capitalize on the early uptick, despite a combination of supporting factors.
- The USD underpinned by tempered expectations for aggressive Fed rate cut in July.
- The positive mood around equities does little to impress the bulls or lend any support.
The USD/CHF pair dropped to fresh session lows in the last hour, back closer to near three-week lows set on Friday, with bears now eyeing a follow-through weakness below the 0.9800 handle.
The pair failed to capitalize on its early uptick to an intraday high level of 0.9841, rather met with some fresh supply and drifted lower through the mid-European session on Monday. The intraday downtick remained unaffected by a follow-through US Dollar uptick and largely shrugged off the prevalent positive mood around equity markets.
The greenback continued gaining some follow-through traction on the back of tempered expectations for a 50 bps Fed rate cut, especially after St. Louis Fed President James Bullard on Friday said that the current US economic condition doesn't warrant a larger cut.
Meanwhile, improving global risk sentiment – as depicted by modest gains across European equities and which tends to undermine demand for the Swiss Franc’s safe-haven demand, also did little to impress the bulls or provide any meaningful impetus to the major.
Despite the pullback, the pair has managed to hold its neck just above the 0.9800 handle. In absence of any major market-moving economic releases, the pair seems more likely to consolidate in a range as investors look forward to the highly anticipated FOMC monetary policy meeting on July 30-31.
Technical levels to watch
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