USD/CHF rebounds above 0.99 on recovering sentiment

The USD/CHF pair rose to a daily high of 0.9950 during the early trading hours of the American session as the heavy selling pressure surrounding the EUR allowed the Greenback to find demand. However, the pair struggled to preserve its momentum and slumped to a session low of 0.9883 before staging a modest recovery. At the moment, the pair was still down 0.15% on the day at 0.9910.

Volatility rises on ECB announcements

Earlier today, the European Central Bank announced that it cut the deposit facility rate by 10 basis points to -0.5% and introduced a new quantitative easing program at a monthly pace of €20 billion as from 1 November. The initial market reaction caused the shared currency to weaken against its major rivals and boosted the US Dollar Index (DXY). 

Later in the day, the DXY, which advanced to a 9-day high of 99.10, lost its traction as markets started to price in an aggressive policy move by the Federal Reserve next week following the ECB's policy decisions. At the moment, the index is down 0.17% on the day at 98.46.

Meanwhile, a Bloomberg report claiming that US President Donald Trump's advisers considered the option of offering China an interim trade deal to secure agricultural purchases and commitments on IP from China in exchange for delaying or even rolling back tariffs allowed risk-on flows to start dominating the market action and weighed on the safe-haven CHF. Although a senior White House official denied the report, the upbeat sentiment seems to be intact with major equity indexes in the US posting gains on the day.

Technical levels to watch for