USD/CHF consolidates recent gains around 0.9300 amid sluggish markets
- USD/CHF retreats after a three-day uptrend to weekly top.
- Firmer US dollar underpinned the latest run-up amid risk-off mood.
- Fed tapering, China and US debt ceiling expiry gain major attention.
- Swiss ZEW Survey data, US Pending Home Sales decorate calendar.
USD/CHF snaps a three-day uptrend while taking rounds to 0.9290 during a quiet Asian session on Wednesday.
The risk barometer pair marked the heaviest daily gains in over a week the previous day, rising for three consecutive days to refresh weekly high, as sour sentiment underpinned the US dollar.
With that, the US Dollar Index (DXY) printed a three-day rally to flash a 10-month peak surrounding 93.80, before easing to 93.72 by the end of Tuesday’s North American session.
The risk aversion wave took clues from the mounting concerns over the US Federal Reserve’s (Fed) imminent tapering of bond purchases, as well as fears concerning China and Evergrande. Also weighing on the sentiment were downbeat data from China and the US.
It’s worth noting that the US 10-year Treasury yields jumped to the highest levels since mid-June while Wall Street closed in the red as traders rushed for risk-safety.
However, the latest headlines suggesting US President Joe Biden’s canceled visit to Chicago to lead negotiations over his legislative agenda seems to trigger hopes of a possible deal over the much-awaited headlines, namely US stimulus and debt limit extension. The same help S&P 500 Futures to print mild gains by the press time.
Looking forward, Swiss ZEW Survey – Expectations for September, prior -7.8, will offer immediate direction to the USD/CHF prices ahead of the Fedspeak and the second-tier US housing numbers. Above all, headlines concerning stimulus, debt limits and China will be the key to follow for fresh impulse.
Technical analysis
Unless breaking the 0.9190 support confluence, including 50-day EMA and an ascending trend line from August 04, USD/CHF bulls remain hopeful of refreshing the yearly high beyond 0.9332.