- Risk-on mood/trade optimism weighed on the CHF’s safe-haven status.
- The USD fails to benefit from the ongoing recovery in the US bond yields.
The USD/CHF pair climbed to near two-week tops, around 0.9960 region in the last hour, albeit struggled to extend the momentum further beyond the very important 200-day SMA.
The pair quickly reversed an early dip to the 0.9935 region and turned higher for the sixth consecutive session on Monday. The incoming positive trade-related headlines remained supportive of a generally risk-on mood and weighed on traditional safe-haven currencies – including the Swiss Franc.
Subdued USD demand seemed to cap gains
It is worth reporting that the US Trade Representative's office on Friday said that the US and China have made progress in trade talks and have come close to finalizing parts of a “phase one” trade deal. The US officials have said they hope to sign a deal in mid-November.
Fading safe-haven demand was further reinforced by a strong intraday rally in the US Treasury bond yields. The US Dollar, however, failed to attract any meaningful buying interest and turned out to be the only factor that might keep a lid on any runaway rally for the major.
Hence, it will be prudent to wait for some strong follow-through buying before traders start positioning for any further appreciating move back towards reclaiming the key parity mark amid absent relevant market moving economic releases from the US.
Technical levels to watch
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