- USD/CHF remained under some selling pressure for the second straight session on Tuesday.
- A broad-based USD weakness was seen as a key factor exerting some pressure on the major.
- The upbeat market mood did little to impress bullish traders or lend any support to the pair.
The USD/CHF pair dropped to 1-1/2-week lows during the early European session, albeit managed to recover few pips thereafter. The pair was last seen trading just above mid-0.9400s.
The pair added to the previous day's losses and witnessed some follow-through selling for the second consecutive session on Tuesday. The downfall was exclusively sponsored by a broad-based US dollar weakness and seemed rather unaffected by the upbeat market mood.
The greenback quickly reversed the gains recorded during the Asian hours that came after White House trade advisor Peter Navarro said that the trade agreement with China has been terminated. Navarro later clarified that his comments were taken out of context and the phase-one pact with China was still in force. The US President Donald Trump provided further assurance and tweeted that the deal was “still intact.”
This, in turn, led a positive turnaround in the global risk sentiment, which got an additional boost following the release of stronger-than-expected PMI reports from the Eurozone and the UK. However, The risk-on flow, which tends to undermine demand for the traditional safe-haven currencies, including the Swiss franc, failed to impress bullish traders or ease the bearish pressure surrounding the USD/CHF pair.
Tuesday's steady decline could further be attributed to some follow-through technical selling below the key 0.9500 psychological level, which marked a near-term bearish break through a one-week-old trading range. Hence, a subsequent slide towards the recent daily closing lows, around the 0.9435 region, en-route the 0.9400 handle, now look a distinct possibility.
Moving ahead, market participants now look forward to the US economic docket, highlighting the flash version of the US Manufacturing and Services PMI. This will be followed by the release of New Home Sales data and the Richmond Manufacturing Index, which might influence the USD price dynamics and produce some meaningful trading opportunities during the early North American session.
Technical levels to watch
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