USD/CHF struggles for direction, consolidates in a range below multi-week tops

   •  Improving risk sentiment amid US-China trade optimism weigh on CHF’s safe-haven status.
   •  USD struggles to gain traction amid the US government shutdown/dovish Fed expectations.

The USD/CHF pair struggled to build on the mid-European session bullish spike and quickly retreated around 20-pips after refreshing multi-week tops.

The pair extended its good two-way price action for the second straight session, with a combination of diverging forces failing to provide any impetus and capping the up-move just ahead of the parity mark. 

The latest US-China trade optimism was evident from a positive trading sentiment around equity markets, which dampened the Swiss Franc's safe-haven demand and extended some support.

The White House economic advisor Larry Kudlow denied the overnight report that the US has turned down an offer of a preparatory trade meeting and contributed to improving risk sentiment.

The positive factor, to a large extent, was negated by some renewed weakness surrounding the US Dollar, which turned out to be the only factor keeping a lid on any attempted intraday bullish move.

Despite a pickup in the US Treasury bond yields, the greenback struggled to build on the overnight uptick and was being weighed down by the partial US government shutdown/dovish Fed expectations.

In absence of any major market moving economic releases from the US, broader market risk sentiment and the USD price dynamics might continue to act as key determinants of the pair's momentum.

Technical levels to watch

The 0.9990-1.0000 area might continue to act as a key resistance, above which the pair is likely to surpass the 1.0020-25 intermediate resistance and test the 1.0055-60 supply zone. On the flip side, the 0.9960-50 region is likely to protect the immediate downside, which if broken might prompt some aggressive long-unwinding trade and accelerate the slide back towards the very important 200-day SMA support near the 0.9900 handle.