• The ongoing slide in the US bond yields capped the USD’s attempted bounce.
• Cautious mood underpins CHF’s safe-haven demand and adds to selling bias.
• Today’s key focus will remain on the release of the latest FOMC meeting minutes.
The USD/CHF pair failed to capitalize on the early uptick to an intraday high level of 1.0021 and dropped over one-week lows in the last hour, with bears now eyeing a follow-through weakness below the parity mark.
The US Dollar held on the defensive amid the ongoing slide in the US government bond yields and was seen as one of the key factors prompting some fresh selling around the major. Uncertainty over the Fed's rate hike path 2019 kept the US Treasury bond yields under pressure and capped the greenback's attempted intraday bounce.
Adding to this, mixed sentiment in the global stock markets, amid nervousness over the next round of US-China trade negotiations, extended some support to the Swiss Franc's relative safe-haven status and further collaborated towards exerting some downward pressure on the major, albeit the downside remained cushioned ahead of today's key event risk.
Hence, today's key focus will be on the release of the minutes from the last FOMC meeting in January, where the central bank opted for a more neutral/data-dependent stance and dropped its previous guidance about the likelihood of further interest rate increases.
Technical levels to watch
On a sustained break below the parity mark, the pair is likely to accelerate the fall further towards the 0.9940 horizontal support before eventually dropping to the 0.9910-0.9900 strong support. On the flip side, the 1.0020-25 region now seems to have emerged as an immediate resistance, above which a bout of short-covering could lift the pair towards the 1.0050 level en-route the key 1.0100 hurdle.
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