- The USD remains on the defensive amid firming Fed rate cut expectations.
- Cautious mood benefits CHF’s safe-haven status and adds to the pressure.
- Wednesday’s key focus remains on the latest FOMC monetary policy update.
The USD/CHF pair extended its steady intraday slide and weakened farther below the parity mark, hitting fresh session lows in the last hour.
The pair stalled its recent recovery move from multi-month lows, rather met with some fresh supply near the 1.0015 region amid a subdued US Dollar price action. Despite a goodish pickup in the US Treasury bond yields, supported by the latest optimism over a possible resolution of the US-China trade disputes, the greenback failed to attract any follow-through buying.
Expectations that the Fed will lay the background for eventual rate cut move(s) by the end of this year kept the USD bulls on the defensive and turned out to be one of the key factors prompting some long-unwinding trade. Adding to this, the prevailing cautions mood around equity markets underpinned the Swiss Franc's safe-haven demand and further collaborated to the intraday slide.
Despite the pullback, the pair might still manage to hold its neck above the very important 200-day SMA ahead of the next big event risk - the latest FOMC monetary policy update, scheduled to be announced later during the US trading session. With two rate cuts already priced in, any hawkish comments might reignite a broad-based USD rally and pave the way for further near-term recovery for the major.
Technical levels to watch
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