USD/CHF sidelined below 0.9900 handle, eyeing US data for some impetus
- USD/CHF failed to build on the overnight recovery move amid weaker USD.
- Persistent trade uncertainty also played its part in capping any strong gains.
The USD/CHF pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Thursday.
The pair failed to capitalize on the previous session's goodish intraday recovery from one-month lows and remained capped below the 0.9900 handle amid conflicting signals from the US President Donald Trump.
Traders preferred to stay on the sidelines
Following the previous day's comments that a trade deal with China may not come until after the 2020 US presidential election, Trump on Wednesday sounded positive and said that talks with China were going very well.
Trump's remarks came after a Bloomberg report indicated that the US and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang.
The developments helped revive hopes that China and the United States may soon seal a preliminary deal to end their 17-month-old trade war and eventually dented demand for perceived safe-haven assets, including the Swiss franc.
However, the fact that the Chinese commerce ministry reiterated its stance that some US tariffs must be rolled back for a phase one deal kept a lid on the latest optimism and held back investors from placing any aggressive bullish bets.
Meanwhile, the US dollar continues to be weighed down by Wednesday's weaker US macro data – ADP report on private-sector employment and ISM Non-Manufacturing PMI – and further collaborated towards capping the major.
Hence, it will be prudent to wait for some strong follow-through buying, possibly beyond the mentioned handle, before traders again start positioning for any further recovery ahead of some second-tier US economic releases.
Technical levels to watch